Not upheld: arrears handling, recovery procedures, and exercise of right of set-off complaint against National Westminster Bank Public Limited Company

Decision detail

Summary

Mr B, a sole trader with a Bounce Back Loan from NatWest, cancelled his loan repayment standing order in December 2024 and made no further payments. From early 2025, NatWest attempted to contact Mr B by phone and email regarding arrears and sent formal correspondence to the registered business address on their system. Mr B complained that the letters were sent to an old residential address he no longer lived at and claimed he had previously requested the address be changed. NatWest had no records of such a request and explained that formal correspondence is sent to the registered address. The loan was defaulted in June 2025 and NatWest exercised its contractual right of set-off. The ombudsman found NatWest acted reasonably throughout, noting that Mr B should have monitored the account after cancelling repayments and that NatWest made reasonable contact attempts through multiple channels.

The Ombudsman's reasoning

The ombudsman found that NatWest acted reasonably by sending formal correspondence to the registered business address held on their system, as they had no evidence of a valid request to change it. The ombudsman noted that Mr B had cancelled the standing order and should have monitored the account status. NatWest made reasonable attempts to contact Mr B through multiple channels (phone and email) before default. The ombudsman concluded that even if different contact details had been used, Mr B was aware he had cancelled repayments and failed to engage with NatWest's contact attempts, so the outcome would likely have been the same. The right of set-off was contractually permitted and fairly exercised following formal default.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website