Not upheld: mortgage administration and processing of lump sum payments complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr K complained that Halifax ignored his express instruction to use a November 2024 lump sum mortgage payment to shorten his remaining mortgage term, instead using it to reduce his contractual monthly payment. Communication between Mr K and Halifax occurred via phone and in-person at a branch. The ombudsman found that Halifax's standard practice of using lump sum reductions to recalculate the CMI was correct and in line with the mortgage contract. While Mr K, whose first language is not English, may have developed an incorrect understanding due to language barriers and translation software use during the initial phone call, the ombudsman found no evidence that Halifax misled him. The ombudsman concluded this was a genuine miscommunication with no fault on either side and did not uphold the complaint, though Halifax's £150 compensation for shortcomings in the branch visit handling was considered fair.

The Ombudsman's reasoning

The ombudsman determined that the core issue was not whether Halifax ignored Mr K's instruction, but rather what Halifax communicated about how the lump sum would be processed and what Mr K understood. The ombudsman found that Halifax's standard practice of using lump sum reductions to recalculate the CMI was correct and in line with the mortgage contract. While there was scope for ambiguity in Mr K's understanding due to language barriers and the use of translation software during the phone call, the ombudsman found no evidence that Halifax's call handler misled Mr K. The ombudsman accepted that the branch visit likely did nothing to clarify the misunderstanding, but found this was a genuine miscommunication with no fault on either side. The fact that Mr K attempted the same action in November 2025 suggested he would not have acted differently even with clearer initial understanding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website