Not upheld: unfair treatment during financial difficulties; persistent debt management; failure to provide adequate forbearance complaint against Barclays Bank UK PLC trading as Barclaycard

Decision detail

Summary

Mrs H complained that Barclays treated her unfairly when she disclosed financial hardship and persistent debt in March 2024, arguing that Barclays should have suspended interest and fees, reduced her minimum payments, and not reported adversely to credit agencies. Mrs H was maintaining repayments through a bridging loan while restructuring her finances for a remortgage. The ombudsman found that by January 2025 Mrs H no longer met the persistent debt definition (paying more in interest/fees than principal over two consecutive 18-month periods), so enhanced forbearance requirements did not apply. While acknowledging that interest suspension and repayment plans are forms of reasonable forbearance, the ombudsman found that such measures would necessarily require adverse credit file reporting, which Mrs H would not have accepted given her remortgage plans. The ombudsman concluded that Barclays provided reasonable support through a breathing space period, specialist support team details, and debt advice signposting, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied a temporal limitation, only considering events after the 12 November 2024 final response letter for most complaint points. On persistent debt, the ombudsman found that by January 2025 Mrs H no longer met the definition of persistent debt (two consecutive 18-month periods of paying more in interest/fees than principal), so the enhanced forbearance requirements at the 36-month point did not apply. On financial hardship, the ombudsman acknowledged that waiving interest and creating repayment plans are examples of reasonable forbearance, but found that such measures fall outside the account terms and conditions and would necessarily require adverse credit file reporting. The ombudsman reasoned that Mrs H would not have accepted such reporting given her remortgage plans, and that suspending interest alone without a repayment plan would not have provided meaningful forbearance given that her outgoings exceeded her income. The ombudsman found Barclays' provision of a breathing space period, specialist support team details, encouragement to discuss circumstances, and debt advice service information constituted reasonable support. The ombudsman also found it reasonable for Barclays to reduce the credit limit given Mrs H's financial circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website