Not upheld: handling of financial difficulty, forbearance measures, and account defaulting complaint against HSBC UK Bank Plc

Decision detail

Summary

Mrs K complained that HSBC treated her unfairly when handling her loan and credit card accounts during financial difficulty. She contacted the bank in November 2024 unable to make payments, and HSBC provided forbearance including stopping interest and charges and extending payment breaks through April 2025. After confirming in June that she still could not pay, HSBC defaulted both accounts. Mrs K disputed the default as disproportionate and claimed insufficient notice, noting she was out of the country from August and only discovered the default when refused credit. The ombudsman found HSBC's forbearance was appropriate, the default was justified after six months of arrears consistent with regulatory guidance, and Mrs K received adequate notice through default notices dated before her departure and explicit discussion during a June call.

The Ombudsman's reasoning

The ombudsman concluded that HSBC provided appropriate forbearance measures when made aware of Mrs K's financial difficulty. The bank was entitled to default the accounts after six months of arrears had accrued, consistent with ICO guidance of three to six months. Mrs K was given sufficient warning through default notices dated before her departure and through explicit discussion during the 20 June call. The ombudsman found that even if Mrs K had not received the notices, the outcome would likely have been the same given she could not make payments and regulatory requirements obligated the bank to default and report accurately to credit reference agencies.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website