Not upheld: persistent debt handling, failure to provide forbearance, charging during financial difficulty complaint against Capital One (Europe) plc

Decision detail

Summary

Mr W complained that Capital One unfairly charged interest and fees while he was in persistent debt and experiencing financial difficulty following a reduction in his income. Although Mr W maintained his minimum repayments by taking a bridging loan to preserve his credit file for an upcoming remortgage, he requested that Capital One waive or cancel interest and charges. Capital One increased his minimum payment in line with FCA rules but declined to waive charges. The ombudsman found that Capital One was not required to stop interest and charges under the account terms, that such action would not have meaningfully assisted Mr W given his priority to maintain his credit file, and that Capital One had appropriately communicated and encouraged Mr W to discuss his situation. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Capital One could have stopped interest and charges, it was not required to do so under the account terms and conditions. The ombudsman reasoned that stopping interest alone would not have provided meaningful forbearance given Mr W's primary concern was maintaining his credit file for remortgage purposes. Capital One had encouraged Mr W to discuss his situation and had already explained its position. The ombudsman concluded that Mr W had found a temporary solution through the bridging loan and that Capital One was entitled to resume charges after the breathing space ended.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website