Not upheld: forbearance and financial difficulty support; alleged failure to provide appropriate support options complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr D complained that Halifax refused to provide temporary support without requiring him to accept a formal repayment plan that would affect his credit file and block his card. Mr D was experiencing financial difficulty, health vulnerabilities, and had recently lost income, and he contacted Halifax proactively before falling into arrears. Halifax offered forbearance options and explained the consequences, but Mr D rejected them and instead borrowed £13,000 from a friend to clear his balance. The ombudsman found that Halifax acted appropriately by offering forbearance, explaining the impact of each option, and allowing Mr D to make an informed choice. The ombudsman rejected arguments that Halifax should have offered a no-interest plan without credit file impact, as this is a matter for the regulator, and found Halifax's approach was responsible and compliant with regulatory requirements.

The Ombudsman's reasoning

The ombudsman found that Halifax acted appropriately by offering forbearance options and explaining their consequences to Mr D, allowing him to make an informed choice. While Mr D wanted no credit file impact and card access, the ombudsman reasoned that allowing continued card use would be irresponsible lending if a customer is in financial difficulty. Halifax has a duty to report accurate information to Credit Reference Agencies, so any forbearance arrangement must be reported. The ombudsman rejected the argument that Halifax should have offered a no-interest payment plan without credit file impact, noting this is a matter for the regulator to determine, not the ombudsman. The ombudsman also found it unforeseeable that Mr D would borrow £13,000 from a friend when his minimum payment was £128, so Halifax cannot be held responsible for this decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website