Not upheld: service failure in loan application handling and unfair communication complaint against National Westminster Bank PLC
Financial Ombudsman decision DRN-6242852 of 2026-06-10T00:00:00+00:00. service failure in loan application handling and unfair communication complaint against National Westminster Bank PLC. Outcome: Not upheld.
Decision detail
| Reference | DRN-6242852 |
|---|---|
| Decision date | 2026-06-10T00:00:00+00:00 |
| Firm | National Westminster Bank PLC |
| Product | Personal loan |
| Claim type | service failure in loan application handling and unfair communication |
| Outcome | Not upheld |
| Remedy | NatWest must: (i) remove hard searches from credit files for unsuccessful loan applications; (ii) remove hard search if repeat joint application is unsuccessful; (iii) pay £29.94 for Credit Reference Agency subscription costs; (iv) pay £890.04 for interest incurred on credit card debts; (v) pay £250 for distress and inconvenience. |
Summary
Mr B and Miss N complained about NatWest's handling of their joint and subsequent sole loan applications, which were declined. NatWest upheld the complaint, acknowledging unfair and untimely communication, and offered comprehensive redress including removal of hard searches, reimbursement of subscription costs, credit card interest compensation, and £250 for distress. Miss N sought an ombudsman's decision arguing the distress compensation was insufficient given her vulnerability and the stress caused. The ombudsman found NatWest's overall offer fair and reasonable, applying FOS guidelines for distress compensation and noting the offer exceeded typical awards.
The Ombudsman's reasoning
The ombudsman agreed with the investigator that NatWest's offer was fair and exceeded what the service might typically award. The ombudsman applied FOS guidelines for distress and inconvenience compensation, determining that £250 was appropriate for repeated small errors or a larger single mistake requiring reasonable effort to resolve over days or weeks. The ombudsman noted that NatWest's overall offer, including £890.04 for credit card interest despite no error in declining the sole applications, went further than expected.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| National Westminster Bank PLC, all decisions | 11,490 | 19% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website