Not upheld: forbearance withdrawal and account default complaint against Barclays Bank UK PLC, trading as Tesco Bank

Decision detail

Summary

Ms D complained that Tesco Bank unfairly withdrew an interest-free forbearance arrangement on her credit card account and subsequently defaulted the account, causing her significant distress given her vulnerable circumstances. Tesco had initially provided a six-month interest-free plan requiring £100 monthly payments, which Ms D maintained fully, followed by a four-month extension on the same terms. However, Ms D failed to maintain the agreed payment level in the second month of the extended plan, paying only £50 instead of £100. The ombudsman found that Tesco acted fairly in treating the arrangement as broken and reverting to contractual terms, as Ms D had already received fourteen months of forbearance and demonstrated she could not sustain even the reduced payment plan. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Tesco was entitled to withdraw forbearance after fourteen months when Ms D demonstrated she could not sustain even the reduced payment plan by failing to maintain the agreed £100 monthly payment in the second month of the extended arrangement. Forbearance was designed as a short-term measure, and Ms D's long-term financial difficulties meant the account was no longer sustainable. The agent's communication was professional and clear, and any distress arose from the content of the message rather than its delivery.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website