Not upheld: alleged mis-selling / misleading information regarding interest rate on mortgage current account complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr A complained that Barclays charged him a higher interest rate on his Mortgage Current Account (MCA) borrowing than on his mortgage, contrary to his understanding. He borrowed £10,000 across three withdrawals between June 2019 and February 2020, paying approximately £4,000 in interest at a rate of Bank of England Base Rate + 4.49%. Mr A cited long-term mental health issues for not realizing the rate difference sooner and requested a refund of the excess interest. The ombudsman found that Barclays had informed Mr A of the MCA interest rate at the time of his first withdrawal, provided monthly statements showing the rate and interest charged, and from December 2020 included prominent notices on statements. The ombudsman concluded that the different rates for MCA and mortgage borrowing were justified and properly disclosed, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman concluded that Barclays did not mislead Mr A about the MCA interest rate. The evidence showed Mr A was informed of the rate at the time of his first withdrawal, received monthly statements detailing the interest charged, and from December 2020 received particularly prominent notices explaining the rate. The ombudsman found that MCA borrowing, being flexible and easily accessed, is fundamentally different from mortgage borrowing and therefore justifies a different interest rate. While acknowledging Mr A's mental health issues, the ombudsman determined this complaint concerns the fairness of the interest rate charged, not whether Barclays failed to support a vulnerable customer.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website