Upheld: breach of agreement / procedural unfairness in repossession proceedings complaint against Bank of Scotland plc trading as Birmingham Midshires

Decision detail

Summary

Mr A complained to Bank of Scotland plc trading as Birmingham Midshires about the firm breaching an agreement to hold legal action for one month and instead instructing solicitors to start repossession proceedings on his buy-to-let mortgage. BM immediately accepted the mistake, apologised, stopped the legal action, applied a fresh one-month holding period, and cancelled solicitors' costs. The firm initially offered £200 compensation, later increased to £400. The ombudsman upheld the complaint and determined that £400 was fair and reasonable compensation, considering Mr A's health problems and the stress caused by BM's error, though the ombudsman did not address Mr A's request for additional help with arrears as this was raised after the complaint was referred.

The Ombudsman's reasoning

The ombudsman did not need to decide fault because BM immediately accepted it had made a mistake upon complaint. The assessment focused on whether the compensation offered was fair and reasonable. The ombudsman considered that the initial £200 offer did not fully reflect the impact of BM's error on Mr A given his health problems, but the increased offer of £400 was fair and reasonable in all the circumstances, taking into account the individual's personal circumstances and the stress caused by the error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website