Partially upheld: loan administration and customer service failure complaint against The Co-Operative Bank PLC
Financial Ombudsman decision DRN-6288905 of 2026-04-14T00:00:00+00:00. loan administration and customer service failure complaint against The Co-Operative Bank PLC. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6288905 |
|---|---|
| Decision date | 2026-04-14T00:00:00+00:00 |
| Firm | The Co-Operative Bank PLC |
| Product | loan |
| Claim type | loan administration and customer service failure |
| Outcome | Partially upheld |
| Remedy | Co-op directed to pay £75 compensation for the distress and inconvenience caused by its handling of Miss C's enquiries in July 2025, specifically the confused and inaccurate information provided by the call handler. |
Summary
Miss C complained about Co-op's administration of a £10,000 Professional and Career Development Loan taken out in February 2019 for professional training. The loan had been deferred by 17 months due to Coronavirus pandemic delays, with repayments starting in September 2022. Miss C disputed that interest had been added during deferment and that repayments were correctly applied. In July 2025, a Co-op call handler provided confused information suggesting the loan might be fully repaid, which was contradicted by more accurate information in August 2025 showing an outstanding balance of over £4,500. The ombudsman found that Co-op had correctly operated the loan in accordance with the agreement, but upheld the complaint in part due to the poor quality of the July 2025 call, directing Co-op to pay the £75 compensation it had already offered for the distress and inconvenience caused.
The Ombudsman's reasoning
The ombudsman found that Co-op correctly operated the PCDL in accordance with the loan agreement Miss C signed. The loan structure, deferment application, interest treatment (covered by Skills Funding Agency during deferment), and repayment calculations were all correct. The confusion arose because Miss C conflated two separate accounts (the current account and loan account) with similar account numbers. However, the ombudsman upheld the complaint in part because the July 2025 call handler provided confused and inaccurate information that raised Miss C's expectations that her loan was nearly repaid, causing distress and inconvenience. While the handler did refer the matter to a specialist team for a definitive answer (so Miss C was not definitively misled), the poor quality of information on that call warranted compensation. The ombudsman considered £75 reasonable for this service failure.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| The Co-Operative Bank PLC, all decisions | 2,181 | 21% |
Source
Read the original decision on the Financial Ombudsman Service website