Not upheld: mortgage administration, arrears handling, and failure to contact regarding refinancing options complaint against Bank of Scotland plc trading as Birmingham Midshires

Decision detail

Summary

Mr A and Mr H complained that Birmingham Midshires unfairly started legal action and applied legal costs after their interest-only mortgage term expired with an unpaid balance, claiming the firm had agreed to discuss refinancing options. The firm's adviser failed to call Mr H as arranged in February 2025, but subsequently scheduled three further appointments (May, July, and September 2025) which did not proceed because Mr H could not or would not provide the income and creditor information needed for affordability assessment. The ombudsman found that while the missed February appointment was an error, it was unlikely to have changed the outcome given Mr H's inability to provide necessary information. The ombudsman upheld the firm's offer of £200 compensation and refund of approximately £280 in legal costs as fair and reasonable.

The Ombudsman's reasoning

The ombudsman found that while Birmingham Midshires made an error by missing the February 2025 appointment and failing to promptly reschedule, it was unlikely that Mr A and Mr H would be in a different position if the appointment had gone ahead or been rearranged soon after. This is because Mr H was unable or unwilling to provide the necessary income and creditor information required for affordability assessments at subsequent appointments scheduled in May, July, and September 2025. The ombudsman noted that Mr H was waiting for historic documents from another business in the same group, which were not necessary for the affordability assessment. The firm was entitled to inform Mr A and Mr H about the consequences of non-repayment, including possible possession action. The ombudsman concluded that the firm's offer of £200 compensation and refund of legal costs was fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website