Upheld: poor communication regarding loan repayment and unfair arrears reporting complaint against National Westminster Bank Public Limited Company
Financial Ombudsman decision DRN-6295213 of 2026-04-16T00:00:00+00:00. poor communication regarding loan repayment and unfair arrears reporting complaint against National Westminster Bank Public Limited Company. Outcome: Upheld.
Decision detail
| Reference | DRN-6295213 |
|---|---|
| Decision date | 2026-04-16T00:00:00+00:00 |
| Firm | National Westminster Bank Public Limited Company |
| Product | loan |
| Claim type | poor communication regarding loan repayment and unfair arrears reporting |
| Outcome | Upheld |
| Remedy | £300 compensation to be paid by NatWest to D if not already paid. The bank's agreement to extend the loan term and roll up arrears into the new agreement was considered fair compensation, effectively providing D with a one-year repayment holiday. |
Summary
D, a limited company, complained that NatWest's poor communication prevented it from repaying its £50,000 Bounce Back Loan after the bank closed D's current account in 2023. The account closure letter was unclear about repayment obligations and provided no instructions on alternative payment methods. D made limited efforts to obtain repayment information (one phone call and one email) and did not use the contact details provided in the bank's complaint response. D only started making payments in July 2024 after obtaining the account details, by which time the loan was over a year in arrears. The ombudsman upheld the complaint but found the £300 compensation already offered was fair, as D had failed to mitigate the situation despite having an obligation to repay the loan, and the arrears reporting was justified given the length of non-payment.
The Ombudsman's reasoning
The ombudsman acknowledged that NatWest made communication errors in the account closure letter and failed to assist D when contacted, but concluded that D had an obligation to repay the loan that was not cancelled by the bank's errors. The ombudsman found that D failed to mitigate the situation by not making sufficient effort to obtain repayment information (only one phone call and one email over a year), did not use the contact details provided in the complaint response, and did not attempt to set aside funds or make lump sum payments for arrears once the account details were obtained. The ombudsman concluded that the £300 compensation was fair for the bank's communication failures and that it was fair to report the arrears to the credit file given the length of time they persisted and D's awareness of the obligation to pay.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| National Westminster Bank Public Limited Company, all decisions | 1,179 | 14% |
Source
Read the original decision on the Financial Ombudsman Service website