Not upheld: irresponsible lending and unfair treatment during financial hardship complaint against UK Mortgage Lending Ltd trading as Pepper Money (previously known as Optimum Credit)

Decision detail

Summary

Mr and Mrs J took out a £63,000 secured loan with Pepper Money in March 2019. They experienced financial difficulties during the Covid-19 pandemic, taking payment deferrals and subsequently missing payments in 2020. They complained in July 2025 about irresponsible lending and poor treatment during hardship. The ombudsman found the lending complaint was time-barred. Regarding the hardship complaint, the ombudsman found Pepper treated them fairly as they failed to meaningfully engage with the lender's requests for income and expenditure information, which prevented Pepper from considering all available support options. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Pepper is expected to show reasonable forbearance to borrowers in financial difficulties, Mr and Mrs J did not meaningfully engage with Pepper's attempts to help. Their calls, texts and letters went largely unreturned, and they refused to provide the income and expenditure information necessary for Pepper to consider all available options. The ombudsman noted that for forbearance measures to be effective, borrowers must engage with the process. Pepper did agree to and renew a £50 monthly additional payment despite the lack of engagement. The ombudsman also explained that the loan balance reduction pattern complained about was normal amortisation and not indicative of any error. The original lending complaint was time-barred.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website