Not upheld: failure to intervene in persistent debt and irresponsible lending complaint against MBNA Limited

Decision detail

Summary

Mr H complained that MBNA charged interest on his credit card account between April 2024 and July 2025 while he was experiencing financial difficulty, and failed to proactively offer support. He believed the account showed signs of persistent debt based on statements referencing 'recommended payments' and the fact that interest consumed most of his payments. MBNA argued they were unaware of his difficulties and that minimum payments alone do not indicate financial hardship. The ombudsman found the account did not meet the regulatory definition of persistent debt, no recommended payment was shown in the account summary, and there were no missed payments or arrears to alert MBNA to difficulties. When Mr H disclosed his job loss in July 2025, MBNA appropriately froze interest and applied forbearance. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr H's account did not meet the FCA's regulatory definition of persistent debt (where a consumer pays more in interest, fees and charges than they repay towards capital over an 18-month rolling period). The absence of a recommended payment amount in the account summary section confirmed the account was not in persistent debt. Making minimum payments alone does not indicate financial difficulty or unfair interest application. The interest charges were applied correctly in accordance with the credit agreement. Without clear indicators of financial difficulty and with Mr H maintaining the account in accordance with contractual terms, MBNA had no reasonable basis to proactively intervene before Mr H disclosed his circumstances in July 2025. Once informed, MBNA responded appropriately by freezing interest and applying forbearance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website