Not upheld: unfair support in relation to overdraft; inadequate communication regarding write-off implications; service failures complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Miss W complained that Halifax failed to provide fair support regarding her £1,800 overdraft when she experienced financial difficulties. Halifax initially agreed to write off the balance but failed to clearly communicate that this would result in account closure, loss of overdraft access, and adverse credit file recording. After Miss W objected, Halifax reversed the write-off, refunded charges, suspended future charges, and paid £500 compensation. The ombudsman found Halifax's actions were reasonable overall, though service failures occurred. The ombudsman rejected Miss W's desired outcome of obtaining a write-off while retaining overdraft access, as this would constitute irresponsible lending and double benefit. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found Halifax's response was fair and reasonable overall. While Halifax failed to clearly communicate the implications of the write-off, it took appropriate corrective action by reversing the decision when Miss W objected. The refunding of charges and suspension of future charges were reasonable support measures. The £500 compensation was fair given the service failures and added distress caused. The ombudsman rejected Miss W's desired outcome (write-off with continued facility access) as it would be irresponsible lending and would mean Miss W benefited twice. The ombudsman noted that accurate credit file reporting is required by law and that lenders cannot reasonably write off debt while continuing to offer the same facility.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website