Not upheld: persistent debt handling and unfair treatment; alleged failure to provide adequate forbearance complaint against Lloyds Bank plc

Decision detail

Summary

Miss M complained about how Lloyds treated her credit card account when she fell into persistent debt, seeking refunds of all interest, fees and charges. Lloyds identified persistent debt in September 2018 and sent multiple letters to Miss M between September 2018 and September 2025 offering support and proposing a four-year payment plan, but Miss M did not respond to any correspondence. The ombudsman found that Lloyds complied with FCA CONC 6.7 persistent debt rules by proactively notifying Miss M and seeking engagement, and that the process was dependent on Miss M's participation which did not occur. The complaint was not upheld as the ombudsman concluded Lloyds acted fairly and reasonably in the circumstances.

The Ombudsman's reasoning

The ombudsman found that Lloyds complied with FCA CONC 6.7 rules on persistent debt by notifying Miss M at the requisite times and seeking to engage with her about resolving the situation. Although Lloyds was aware of Miss M's financial difficulty, the regulatory rules place obligations on lenders to be proactive in offering support through correspondence, but this process depends on customer engagement. Since Miss M did not respond to any of Lloyds' multiple letters over several years, Lloyds cannot be found to have acted unfairly. The ombudsman noted that while FCA rules require lenders to highlight persistent debt issues, they do not change the underlying obligation to pay interest and fees on the account.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website