Not upheld: unfair credit reporting of mortgage arrears complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Miss A complained that Halifax unfairly reported mortgage arrears to credit reference agencies when the arrears resulted from her joint account holder Ms N's failure to pay, despite Miss A paying her 50% share. Miss A argued the reporting was inaccurate and unfair and requested removal of the arrears from her credit file and compensation. The ombudsman found that joint borrowers are jointly and severally liable for the full mortgage debt, Halifax was entitled to expect full payments, and the arrears reporting was accurate. The ombudsman did not uphold the complaint, finding Halifax acted fairly and reasonably.

The Ombudsman's reasoning

The ombudsman found that joint mortgage borrowers are jointly and severally liable for the full debt, meaning Halifax can require either or both borrowers to repay the entire amount due. The mortgage terms explicitly state Halifax can require one or all borrowers to make full payments. Halifax clearly communicated this to Miss A in late 2024. Since the mortgage account was genuinely in arrears (with at least one month's payment outstanding by May 2025), Halifax was entitled to report this accurately to credit reference agencies. The court order between Miss A and Ms N does not change their contractual obligations to Halifax. Miss A had the opportunity to make up the payments when notified of arrears in April and May 2025 but did not do so. Therefore, the arrears reporting was accurate and fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website