Not upheld: Debt collection practices complaint against TSB Bank plc

Decision detail

Summary

Mrs B complained that TSB mishandled her Bounce Back Loan by failing to communicate with her, delaying recovery action for three years, and then suddenly referring the debt to a collection agency in October 2025 without adequate notice, causing her distress. TSB had intended to refer the account to a debt collection agency in 2022 following Mrs B's cessation of trading but failed to do so due to an administrative error. The ombudsman found that TSB had taken reasonable steps to contact Mrs B about the arrears in 2022 through correctly addressed letters and multiple contact attempts, and that the three-year delay resulted in no additional financial disadvantage as no extra interest or charges were applied. The ombudsman did not uphold the complaint, finding that TSB's apology for the administrative error was proportionate and that Mrs B had the opportunity to engage with TSB herself during the delay period.

The Ombudsman's reasoning

The ombudsman found that while TSB made an administrative error in delaying the referral to the debt collection agency by three years, this did not result in unfair financial or substantive disadvantage. TSB took reasonable steps to communicate with Mrs B about the arrears in 2022 through correctly addressed letters and multiple contact attempts. The ombudsman noted that Mrs B, as the account holder, should have been aware that payments were missed regardless of whether she received TSB's notifications. The delay did not result in additional interest or charges, and the outstanding balance remained the same. The ombudsman found it foreseeable that TSB would take recovery action at some stage given the loan remained outstanding and repayable. Mrs B had the opportunity to contact TSB herself between 2022 and 2025 but did not do so.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website