Not upheld: irresponsible lending, unaffordable credit, inadequate forbearance, debt sale, complaint handling complaint against Bank of Scotland plc t/a Halifax

Decision detail

Summary

Mrs M complained that Halifax irresponsibly provided her with a credit card in December 2023, failed to provide adequate forbearance when she experienced financial difficulties, and wrongfully sold her debt to a third party. Halifax assessed her income at £2,035 monthly net and conducted proportionate affordability checks showing sufficient disposable income. When Mrs M exceeded the credit limit from May 2024 and missed payments from August 2024, Halifax attempted contact, offered a payment holiday, and issued arrears letters before issuing a Default Notice in November 2024 and selling the debt in April 2025. The ombudsman found Halifax's lending decision, forbearance actions, and debt sale were all fair and reasonable, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Halifax conducted proportionate and reasonable affordability checks appropriate to the modest £500 credit limit. Mrs M's income was verified, expenditure was assessed using reasonable statistical modelling, and her credit history showed well-maintained existing credit with only historic defaults from 42 months prior. When Mrs M encountered difficulties, Halifax complied with forbearance obligations by attempting contact, offering a payment holiday, and providing arrears letters. The Default Notice was justified given the sustained credit limit excesses, missed payments, and broken arrangement. The debt sale was fair as Mrs M was informed of this possibility in the Default Notice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website