Not upheld: arrears reporting and debt collection on mortgage with disputed redemption payment complaint against Pepper (UK) Limited trading as Engage Credit

Decision detail

Summary

Ms M and Mr Q complained that Engage Credit was unfairly chasing them for an outstanding mortgage balance and reporting arrears after they sold their property. The issue arose because their solicitors made an incomplete redemption payment of £126,150.52 on 26 March 2025, leaving a shortfall on the total redemption amount of £134,700.19. Engage had provided clear redemption statements valid until 12 March 2025 with information about interest accrual and the need for updated statements if redemption occurred later. The ombudsman found that Ms M and Mr Q remained liable for the full outstanding balance and that Engage acted fairly in pursuing repayment and reporting arrears, noting that any complaint about the solicitors' error was separate from their obligation to repay the mortgage.

The Ombudsman's reasoning

The ombudsman found that Engage provided correct redemption information and that the outstanding balance was genuine and owed by Ms M and Mr Q. Although the error appears to have been made by their solicitors (acting as their agents), this does not relieve Ms M and Mr Q of their obligation to repay the mortgage. The ombudsman determined that it was reasonable for Engage to chase repayment and report arrears to credit reference agencies, as the mortgage remained unpaid and in arrears. Any complaint against the solicitors is separate from the obligation to repay Engage.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website