Not upheld: forbearance and financial difficulty handling; application of overpayments complaint against Healthcare Finance Limited

Decision detail

Summary

Miss W complained that HFL mishandled her dental treatment loan account after she experienced financial difficulties in August 2025. She had made a £600 overpayment in December 2024 and later requested a reduced payment plan. HFL offered three months of reduced payments (£100/month) but explained arrears would continue to accrue and need to be cleared within the original loan term. Miss W disputed this, arguing the shortened loan term from her overpayment should allow HFL to extend the term back to the original date. The ombudsman found HFL correctly applied the overpayment under the loan terms, offered appropriate forbearance through the payment plan, and clearly communicated the implications, thus meeting its CONC obligations. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that HFL correctly applied the £600 overpayment to reduce the loan balance and term under the loan agreement terms. HFL offered forbearance by accepting reduced payments for three months, which aligns with CONC requirements to treat customers in financial difficulties with due consideration. While HFL could have considered longer-term arrangements, it was not obliged to do so given Miss W initially requested the three-month plan and accepted it with full understanding of the implications. The arrears accruing during the plan period are legitimately owed under the loan agreement, and HFL was not required to suspend them.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website