Partially upheld: calculation accuracy and complaint handling complaint against Pepper (UK) Limited trading as Engage Credit

Decision detail

Summary

Mrs O complained that Engage Credit incorrectly calculated her contractual monthly instalment (CMI) when her mortgage interest rate returned to 8.04% in August 2025, as the new CMI was approximately £10 higher than when the same rate applied in February 2023. The ombudsman found the CMI was calculated correctly using the proper balance, interest rate and remaining term, with the difference attributable to timing of calculation and accrued interest. However, Engage Credit's final response contained errors stating an incorrect balance and remaining term, which caused Mrs O unnecessary worry and forced her to escalate to the FOS. The complaint was partially upheld and £125 compensation was ordered for the inconvenience caused by these errors in the final response.

The Ombudsman's reasoning

The ombudsman found that Engage Credit correctly calculated the CMI based on the correct balance, interest rate and remaining term in August 2025. The higher CMI compared to February 2023 was explained by factors such as the timing of the calculation within the month and accrued interest. However, Engage Credit's final response contained material errors regarding the balance and remaining term, which caused Mrs O unnecessary worry and inconvenience by failing to put her mind at rest and forcing her to escalate to the FOS.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website