Not upheld: repossession and forbearance in hire purchase agreement complaint against Zopa Bank Limited

Decision detail

Summary

Miss P complained that Zopa Bank Limited acted unfairly by repossessing her financed car and failing to show sufficient forbearance despite her difficult personal circumstances including bereavement and mental health difficulties. The agreement fell into arrears in early 2025, and following a March 2025 live chat where Miss P believed payment of £38.19 would prevent default action, Zopa proceeded to default the agreement and repossess the vehicle. The ombudsman found that while the live chat wording was capable of causing confusion, the chat as a whole made clear that future contractual payments would need to be maintained and an arrangement agreed for arrears. The ombudsman concluded that Zopa acted fairly as the agreement remained in significant arrears after the chat with no sustainable repayment arrangement, and that Zopa showed appropriate forbearance through engagement, notices, and requests for financial information. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the March 2025 live chat wording was capable of causing confusion, the chat as a whole made clear that future contractual payments would need to be maintained and an arrangement agreed for remaining arrears. The critical issue was not the £38.19 payment but that the agreement remained in significant arrears afterwards and contractual payments were not maintained. The ombudsman applied ICO guidance indicating that default is usually appropriate where a customer is three to six months in arrears and the relationship has broken down. The evidence showed continuing arrears over time with no sustainable repayment arrangement. Zopa was entitled to repossess without a court order as less than one third of the total amount had been repaid. The ombudsman concluded Zopa showed appropriate forbearance by engaging over time, issuing notices, requesting financial information, and accepting reduced payments during discussions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website