Not upheld: unfair application of interest and charges; inadequate communication regarding removal of specialist support complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mrs J complained that NatWest unfairly applied interest and charges to her overdraft account from June 2025 after removing her from the Specialist Support Team without proper notice. She claimed she did not receive an April 2025 letter asking if she still needed support and was unaware that interest would resume. Mrs J, who is vulnerable (on benefits, a single parent with mental illness and PTSD), stated she was forced to borrow money from family to pay the charges. The ombudsman found that while NatWest could have communicated better (particularly by using email as their records indicated), NatWest was entitled to resume interest charges in accordance with the account terms and conditions once the account was within its overdraft limit. The ombudsman rejected arguments that interest should be suspended indefinitely or during active complaints, and found the £100 refund already paid to be sufficient compensation.

The Ombudsman's reasoning

The ombudsman found that while NatWest could have communicated better with Mrs J (particularly by using email as noted in their records rather than sending a letter), NatWest was entitled to resume interest charges once the account was within its overdraft limit, in accordance with the account terms and conditions. There is no requirement for NatWest to suspend interest indefinitely or to refrain from charging interest while a complaint is ongoing. Even if Mrs J had received the April 2025 letter and requested continued SST support, interest would still have resumed. The ombudsman acknowledged Mrs J's vulnerability and financial difficulties but found that NatWest's subsequent offer of an income and expenditure assessment form was appropriate. The £100 refund already paid was deemed sufficient to recognise any distress and inconvenience caused by communication failures.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website