Not upheld: Debt collection practices complaint against K (limited company)

Decision detail

Summary

K, a limited company, complained that NatWest acted unfairly by declining to renew its £8,000 overdraft facility, issuing formal demands for repayment, and transferring both the overdraft and £50,000 Bounce Back Loan to a debt collection agency. NatWest had requested financial information by 15 August 2025 to assess renewal, extended the deadline to 29 September 2025 after a meeting, and issued formal demands on 2 October 2025 when K failed to provide the information. Mr H proposed repaying from a delayed property sale, but NatWest proceeded with recovery action. The ombudsman found NatWest acted fairly and reasonably, having provided adequate notice, multiple opportunities to engage, and clear warnings about consequences. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NatWest was entitled to request financial information before renewing an expiring overdraft facility. The bank provided reasonable notice, extended deadlines, and clear warnings about potential consequences. Mr H's proposal to repay from an uncertain future property sale was not a sufficient basis for NatWest to defer formal recovery action after two months of non-engagement. The escalation to formal demand and debt collection was proportionate given the timeline and repeated opportunities to provide information or repay. Regarding the Bounce Back Loan, NatWest treated K as the liable party throughout and did not seek personal recovery from Mr H, so no inconsistency with the scheme was found.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website