Not upheld: alleged mis-selling of loan terms and failure to provide support during financial difficulty complaint against National Westminster Bank Public Limited Company

Decision detail

Summary

Mr F and Miss B complained to the FOS about their £30,000 personal loan with NatWest, claiming they were misled about an automatic interest rate reduction when the balance fell below £25,000, that they received no support when Mr F was injured in 2021, and that NatWest failed to assist when they experienced financial difficulty in late 2023. The ombudsman found no evidence supporting the claim of misleading statements about interest rate reduction, no record of a 2022 complaint, and documented evidence that NatWest made multiple attempts to contact the customers and offer support when missed payments began in November 2023. The complaint was not upheld, with the ombudsman finding NatWest acted appropriately in defaulting the loan after three missed payments when customers failed to respond to offers of assistance.

The Ombudsman's reasoning

The ombudsman found that automatic interest rate reduction upon balance falling below £25,000 is not how loans normally work, and there was insufficient evidence of misleading statements beyond the customers' recollection against the staff member's denial. Regarding the 2021 injury, there was no record of the customers requesting support or attempting to make a lump sum payment at that time. For the 2022 complaint, NatWest had no record and the customers provided no evidence. Crucially, when financial difficulty became apparent in late 2023, NatWest made multiple documented attempts to contact the customers through various channels and provided letters inviting them to discuss solutions, but the customers did not engage. The bank was entitled to default the loan after three missed payments when customers failed to respond to these offers of support.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website