Not upheld: persistent debt classification and mandatory payment plan complaint against Barclays Bank UK PLC trading as Barclaycard

Decision detail

Summary

Mrs C complained that Barclaycard forced her into a paydown plan she did not want to enter. She held a credit card with a £16,000 balance and made only minimum monthly repayments that did not reduce the capital owed. Barclaycard identified the account as being in persistent debt under FCA rules and sent notifications in September 2023 and follow-up emails in 2024-2025, though Mrs C claims not to have received them. In April 2025, Barclaycard required her to either clear the balance or enter a four-year paydown plan. The ombudsman found Barclaycard acted fairly and in accordance with regulatory obligations, as it had sent multiple warnings and Mrs C's inactive email address was not the firm's fault.

The Ombudsman's reasoning

The ombudsman found that Barclaycard correctly identified the account as being in persistent debt under FCA rules, which define this as accounts where payments comprise lower principal than interest, fees and charges over an 18-month period. Although Mrs C claims not to have received the September 2023 letter and subsequent emails, Barclaycard provided persuasive evidence that these were sent to the address on file. The ombudsman noted that while Mrs C's email address was inactive until July 2025, this was not the firm's fault. The ombudsman concluded that Barclaycard was obliged by regulation to take action and that by the time Mrs C contacted the firm in 2025, the account had already been classified as in persistent debt, leaving limited options. The firm acted in accordance with regulatory requirements and did not act unfairly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website