Partially upheld: mortgage administration errors, interest rate product application, complaint handling failure complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr and Mrs B complained to Halifax about interest rates on their mortgage and subsequently about service failures in 2025 when discussing a way forward after the mortgage fell into arrears due to illness, accident and redundancy. Halifax acknowledged making a mistake in February 2025 by not clearly explaining that a payment arrangement was required to activate an agreed term extension, resulting in a one-month delay. Halifax also acknowledged incorrectly closing a March 2025 complaint without providing a response. The Ombudsman found Halifax's offers of £350 and £150 compensation respectively, plus backdating the term extension to March 2025 and applying a backdated interest rate product from September 2023 (conditional on acceptance), to be fair and reasonable remedies. The complaint regarding interest rates applied before 2025 fell outside the Ombudsman's jurisdiction as it was not raised within six months of Halifax's final response.

The Ombudsman's reasoning

The Ombudsman found that Halifax's mistake in not explaining the payment arrangement requirement clearly was established, so the focus was on appropriate redress. The term extension would likely have been activated in March 2025 had the process been explained properly, making the one-month delay and £350 compensation fair. The £150 compensation for the incorrectly closed complaint was proportionate. The backdated interest rate product offer was conditional on acceptance, which Mr and Mrs B had not provided. The Ombudsman rejected Mr and Mrs B's challenge to Halifax's calculation without independent expert evidence. Credit file reporting was accurate as arrears existed regardless of the interest rate applied.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website