Not upheld: mortgage end of term handling, misleading information about legal action pause, poor complaint handling and service failures complaint against Lloyds Bank PLC

Decision detail

Summary

Mr A complained that Lloyds Bank PLC treated him unfairly when his mortgage term ended, claiming Lloyds had agreed to give him time to sell the property but then proceeded with legal action. Mr A also complained about misleading information regarding pausing legal action, poor service, and failure to follow instructions. The ombudsman found most complaints were referred outside the six-month time limit and could not be considered. For the complaints within jurisdiction, while acknowledging Lloyds' poor service and misleading information, the ombudsman found the £850 compensation already paid was fair and in line with FOS guidelines. The ombudsman did not uphold the complaint as Lloyds had already fairly settled it.

The Ombudsman's reasoning

The ombudsman applied strict time limit rules under FCA handbook provisions, finding that the complaint was referred outside the six-month deadline and Lloyds did not consent to late consideration. The ombudsman found it more likely than not that the final response was sent on 31 January 2025 based on Lloyds' system records and correctly addressed letter, despite Mr A's claims of non-receipt. For the complaints within jurisdiction (March and May final responses), the ombudsman found that while Lloyds provided misleading information about pausing legal action and delivered poor service, the £850 compensation already paid was fair and proportionate under FOS guidelines for substantial distress and inconvenience over a sustained period. The ombudsman clarified that compensation cannot be used to punish the firm or mandate system changes.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website