Not upheld: irresponsible lending, complaint handling, settlement negotiation complaint against Zopa Bank Limited

Decision detail

Summary

Mr I complained that Zopa failed to engage sufficiently on settlement for Loan Two and provided conflicting communication about Loan One. Zopa had lent Mr I £7,420 in August 2018 (Loan One) and £16,160 in August 2019 (Loan Two), both of which went into default. Loan One was closed in March 2022 but Mr I received an erroneous letter requesting repayment, which Zopa corrected within days. In December 2022, Zopa accepted Loan Two was unaffordable, removed interest and charges, leaving £15,715.04 outstanding. Zopa offered 50% settlement or a repayment plan, but Mr I's offers of 10-25% were rejected. The ombudsman did not uphold the complaint, finding Zopa acted fairly in correcting errors promptly and in rejecting below-market settlement offers while providing alternative repayment options and debt advice.

The Ombudsman's reasoning

For Loan One, Zopa corrected its communication error within days, causing no financial impact to Mr I. The closure of the account meant no further payments were required, though an internal outstanding balance remained visible only to Zopa. For Loan Two, although Zopa accepted the lending was irresponsible and removed interest and charges, Mr I still benefited from the funds lent and must repay the capital amount. Zopa acted fairly in rejecting settlement offers of 10-25% when they had offered 50% and in requiring repayment of the remaining balance, as they offered alternative repayment plan arrangements and signposted debt advice services. The ombudsman found no evidence of unfair pressure or breach of CONC 7.3.10.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website