Not upheld: unfair debt recovery practices; proportionality of pursuing shortfall debt from vulnerable elderly debtor complaint against Topaz Finance Limited (trading as Hyalite Mortgages)

Decision detail

Summary

Mrs D sought to have a mortgage shortfall debt of approximately £47,000 from 1993 written off, arguing it should be statute-barred and that pursuing it from her as an elderly, vulnerable person with serious health issues and no means of repayment was unfair. Hyalite maintained the debt was enforceable because £1 monthly payments had acknowledged it. The ombudsman found that while Hyalite was legally entitled to pursue the legitimate debt, the firm should carefully consider the proportionality of recovery efforts given Mrs D's circumstances and recommended she provide verifiable evidence of her financial and health position for Hyalite's consideration.

The Ombudsman's reasoning

The ombudsman acknowledged that while Mrs D is vulnerable and elderly with no means of repayment, she has accepted the debt is legitimate and not statute-barred. The ombudsman found no power to direct write-off of an acknowledged legitimate debt as this would constitute interference with the firm's commercial judgement. However, the ombudsman suggested Hyalite should carefully consider whether the operational costs of administering £1 monthly payments justify pursuit of this historic debt given Mrs D's circumstances, and recommended Mrs D provide verifiable evidence of her financial position, housing situation, and health for Hyalite's consideration.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website