Not upheld: account administration error; failure to maintain manual review process; automated letter generation complaint against UK Mortgage Lending Ltd trading as Pepper Money

Decision detail

Summary

Mr and Mrs G complained about how Pepper Money handled overpayments on their secured loan account, which they began making in October 2022 to pay off the loan early. Multiple complaints were raised between July 2023 and March 2025 regarding the handling of overpayments and automated letters requesting instructions on credit balances. The ombudsman could not consider the 2023 and 2024 complaints as they were referred outside the six-month time limit. For the 2025 complaints, the ombudsman found that Pepper had already provided fair resolution through £175 compensation for an October 2024 error when a manual review reminder was not reset, and that Mr and Mrs G were not financially disadvantaged as credit interest was paid on overpayments. The complaint was not upheld as Pepper had done enough to resolve the matter.

The Ombudsman's reasoning

The ombudsman applied DISP 2.8.2R time limit rules and found that the 2023 and 2024 complaints were referred more than six months after the final responses were issued, and Pepper did not consent to their consideration. No exceptional circumstances were demonstrated. For the 2025 complaints, the ombudsman found that Pepper had already provided a fair and reasonable resolution by acknowledging the October 2024 error, apologising, and paying £175 compensation. The ombudsman noted that Pepper's credit interest policy on overpayments meant Mr and Mrs G were not financially disadvantaged by the delay. While the automated letters were frustrating, Pepper had explained they could not be stopped and had instructed Mr and Mrs G to disregard them. The ombudsman rejected the argument that Pepper should be required to change its computer systems, noting this was outside the ombudsman's remit and was no longer relevant as the loan had been fully redeemed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website