Not upheld: Mortgage administration / arrears handling complaint against Bank of Ireland (UK) Plc

Decision detail

Summary

Mr and Mrs J complained to the Financial Ombudsman Service about Bank of Ireland's decision to instruct solicitors to recover mortgage arrears in June 2025 and commence legal action, as well as the solicitors' failure to send a letter in large print. Mr and Mrs J, who are vulnerable (Mr J has chronic health conditions and cognitive impairment; Mrs J lacks executive function), sought additional time to sell properties from their portfolio to clear arrears that had accumulated since June 2023 and reached approximately £45,000. The ombudsman found that BOI had provided extensive forbearance over nearly three years, made adjustments for vulnerabilities, and had no reasonable alternative after promises to clear arrears through property sales failed to materialize. The ombudsman upheld the £50 compensation for the large print letter failure but rejected the complaint, finding BOI acted fairly and reasonably in commencing legal action given the circumstances.

The Ombudsman's reasoning

The ombudsman acknowledged Mr and Mrs J's vulnerabilities and the stress caused by the mortgage situation, but applied an impartial, evidence-based approach. The ombudsman found that BOI had provided forbearance measures over a long period (since at least 2023), made adjustments for Mr J's health issues, and granted requests for additional time. However, after nearly three years with no progress on property sales, arrears increasing monthly to £45,000, and unfulfilled promises by Mr J that arrears would be cleared (including a claimed remortgage that never materialized), the ombudsman concluded BOI acted reasonably in commencing legal action. The ombudsman noted that the mortgage was already on interest-only terms and that other forbearance options (deferring interest, capitalizing arrears, term extension) would be unaffordable or counterproductive. While BOI failed to send a letter in large print, the £50 compensation paid by solicitors was deemed sufficient. The ombudsman clarified that the FOS cannot force lenders to hold legal action and cannot interfere with court proceedings.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website