Not upheld: unfair default of business overdraft during period of vulnerability complaint against The Royal Bank of Scotland Public Limited Company (RBS)

Decision detail

Summary

Mrs M complained that RBS unfairly defaulted her business overdraft during a period of serious ill health, despite her efforts to engage and provide information. The overdraft facility expired in June 2025 and RBS requested financial information to assess repayment options, granting multiple extensions between June and September 2025 in consideration of Mrs M's medical circumstances. Mrs M provided the requested information on 25 September 2025, three days after the final agreed deadline of 22 September. RBS decided not to consider further arrangements and proceeded with default. The ombudsman found that RBS acted fairly and reasonably by providing multiple opportunities and proportionate flexibility before taking formal action, and that the three-day delay in providing information would not necessarily have changed the outcome given earlier missed deadlines and the months already allowed since expiry.

The Ombudsman's reasoning

The ombudsman found that RBS provided multiple opportunities and reasonable flexibility for Mrs M to provide required financial information, with several extensions granted in consideration of her medical circumstances. Although Mrs M missed the final deadline by three days, the ombudsman noted this could not be considered in isolation given several earlier missed deadlines and the several months already allowed since the overdraft expired. The ombudsman concluded that RBS had obligations to bring the matter to structured resolution to prevent further deterioration of Mrs M's financial position, and that the information provided on 25 September would not necessarily have changed RBS's position given it was dependent on future events. The ombudsman also found the different treatment of the overdraft and Bounce Back Loan was reasonably explained by the different nature of the products.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website