Upheld: service failure and unfair treatment in processing payment holiday request complaint against Bank of Scotland plc
Financial Ombudsman decision DRN-6296325 of 2026-04-16T00:00:00+00:00. service failure and unfair treatment in processing payment holiday request complaint against Bank of Scotland plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6296325 |
|---|---|
| Decision date | 2026-04-16T00:00:00+00:00 |
| Firm | Bank of Scotland plc |
| Product | loan |
| Claim type | service failure and unfair treatment in processing payment holiday request |
| Outcome | Upheld |
| Remedy | BOS must pay £250 compensation to Mr S for the trouble, upset, and inconvenience caused by the unnecessary delay. BOS must amend credit file reporting to show the November payment as not being missed or late, as it should have been covered by the PAYG arrangement had it been processed when first requested. |
Summary
Mr S complained that Bank of Scotland unfairly delayed his Pay As You Grow payment holiday request on his Bounce Back Loan by requiring relationship manager approval, a requirement not stipulated in the loan terms. The seven-week delay from November to late December 2024 resulted in a missed £173.22 payment and caused Mr S frustration during a period of financial difficulty. BOS acknowledged the service fell short but initially declined compensation. The ombudsman upheld the complaint, finding the requirement was an unnecessary barrier, and ordered £250 compensation plus credit file amendment to reflect that the missed payment should have been covered by the timely PAYG arrangement.
The Ombudsman's reasoning
The ombudsman found that BOS acted unfairly by imposing a contractually unsupported requirement for relationship manager approval, which caused unnecessary delay of seven weeks. While Mr S's request to write off the entire loan balance was deemed disproportionate to the harm caused, the delay did result in avoidable frustration, inconvenience, and arrears accrual. A modest compensation payment of £250 was determined to be fair and proportionate, alongside correction of the credit file to reflect that the November payment should have been covered by the PAYG arrangement that should have been in place.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Bank of Scotland plc, all decisions | 27,170 | 11% |
Source
Read the original decision on the Financial Ombudsman Service website