Not upheld: alleged misinformation about mortgage overpayment treatment and application complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr M and Ms O complained that Barclays misled them about their mortgage overpayments, leading them to believe approximately £40,000 in overpayments could be used towards final settlement. They discovered close to mortgage maturity that they were short of funds for redemption. Barclays maintained that overpayments were immediately applied to reduce the mortgage balance and were reflected in the outstanding balance figures shown on statements. The ombudsman reviewed the December 2021 call recording and found that Barclays correctly explained the overpayment treatment. Although Barclays failed to provide specific information Mr M requested in a follow-up letter, the ombudsman found this was an administrative error rather than misleading advice, and the £200 compensation previously offered was fair and reasonable.

The Ombudsman's reasoning

The ombudsman found that Barclays correctly applied overpayments by immediately reducing the mortgage balance, meaning the overpayment figure shown on statements had already been deducted from the outstanding balance. The December 2021 call recording and subsequent written correspondence clearly explained this position. Although Barclays failed to provide the specific information Mr M requested in a follow-up letter, this was an administrative error rather than misleading advice about how overpayments worked. The ombudsman acknowledged the distress caused but concluded that Mr M and Ms O should have sought clarification between 2021 and the mortgage maturity date, particularly given that annual statements and redemption statement options were available.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website