Partially upheld: loan termination, default reporting, and service failures complaint against Zopa Bank Limited

Decision detail

Summary

Miss T complained that Zopa Bank terminated her £2,500 loan and reported a default to credit reference agencies after she missed payments in July, August and September 2025 following job loss. She had submitted an income and expenditure form proposing a £20 monthly repayment but Zopa Bank rejected this as unaffordable. The ombudsman found that Zopa Bank acted fairly in refusing the reduced payment proposal and in applying the default in accordance with regulatory requirements, but upheld the complaint regarding service failures including incorrect information about direct debit collection and failure to provide a callback. Zopa Bank was ordered to pay £50 compensation for these service failures.

The Ombudsman's reasoning

The ombudsman found that Zopa Bank acted fairly and reasonably in refusing the £20 repayment proposal because its own assessment showed it was unaffordable for Miss T. The default notice was correctly addressed and sent, fulfilling regulatory requirements even though Miss T did not receive it. The subsequent acceptance of a £20 arrangement after termination did not mean the pre-default offer should have been accepted. However, Zopa Bank's service failures in providing incorrect information about direct debit collection and the default date, and failing to provide a callback, caused distress and inconvenience warranting compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website