Not upheld: mortgage possession delay and property sale handling complaint against Bank of Scotland plc

Decision detail

Summary

Miss P complained that Bank of Scotland delayed taking possession of her mortgaged property, causing arrears to accumulate over several years. BOS initially rejected the complaint but later offered to adjust the account as though possession had been pursued from April 2020, reducing arrears and paying £1,000 compensation. Miss P accepted this offer but later complained that BOS continued charging interest and that the property sold for too low a price (£120,000, leaving a £138,000 shortfall), allegedly due to deterioration caused by the delayed possession. The ombudsman found the settlement offer was fair, continuing interest charges were reasonable, and there was no evidence BOS caused the property value loss, which appeared consistent with general market trends in the area.

The Ombudsman's reasoning

The ombudsman applied the principle that redress should put the complainant back into the position they would have been in but for the business's mistake. Since BOS would have continued charging interest if it had pursued possession from April 2020, it was reasonable to continue charging interest after the settlement offer. The ombudsman found that COVID-19 restrictions would have prevented possession action until mid-2021 at earliest, making it unlikely the property would have sold before 2022, not 2020. Therefore, the property's condition in early 2020 was not relevant. The valuations by a RICS qualified surveyor were reasonable and supported by the low number of viewings, suggesting the valuation was not unreasonably low. The general downward trend in property values in the area, rather than BOS's actions, appeared to account for the value reduction.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website