Partially upheld: Irresponsible lending complaint against Barclays Bank UK PLC
Financial Ombudsman decision DRN-6417896 of 2026-06-24T00:00:00+00:00. Irresponsible lending complaint against Barclays Bank UK PLC. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6417896 |
|---|---|
| Decision date | 2026-06-24T00:00:00+00:00 |
| Firm | Barclays Bank UK PLC |
| Product | Mortgage |
| Claim type | Irresponsible lending |
| Outcome | Partially upheld |
| Remedy | Barclays Bank UK PLC must: (1) Refund all interest charged after August 2019 on balances above £14,590 and use refunded sums to reduce MCA balance; (2) Calculate interest on balance above £14,590 for remaining mortgage term and use to reduce MCA balance; (3) Reduce MCA reserve limit to match resulting balance; (4) Discuss repayment options with Mr R now and on an ongoing basis; (5) If MCA balance remains above £14,590 at end of term, arrange no interest on amount above that limit; (6) Ensure rebalancing feature is disabled and not reactivated; (7) Pay Mr R £450 for upset and inconvenience. |
Summary
Mr R complained that Barclays irresponsibly lent through a mortgage current account reserve facility by increasing the limit when it should have known of his financial difficulties and removed his access. Mr R had experienced financial hardship in 2021 when he lost his job and became a carer, but subsequently resolved his situation and maintained mortgage payments for 3.5 years without using the reserve. In April 2025, facing unexpected bills, Mr R began using the reserve facility and within three months had nearly exhausted the £26,320 limit, including spending on gambling. The ombudsman found that while the reserve limit increases from August 2019 onwards should not have occurred, Barclays was not unreasonable in maintaining Mr R's access given his demonstrated ability to manage payments. The ombudsman ordered Barclays to refund excess interest, limit future interest charges, disable rebalancing, and pay £450 compensation, but rejected requests to write off the excess capital balance.
The Ombudsman's reasoning
The ombudsman found that while Barclays should not have increased the reserve limit from August 2019 onwards, it was not unreasonable for Barclays to maintain Mr R's access to the reserve facility. Although Mr R had experienced financial difficulties in 2021, he subsequently resolved them, maintained mortgage payments for approximately 3.5 years, and did not use the reserve during that period. Barclays had no reason to proactively remove access to the facility. However, the reserve limit increases were not justified and must be reversed through refunding excess interest and limiting future interest charges. The ombudsman rejected Mr R's request to write off the capital balance above £14,590 because he had spent the money (including on a car purchase with lasting value) and it would be unfair to write off capital debt. The £450 compensation was deemed appropriate given that Barclays responded relatively quickly once the limit was exceeded and offered assistance within three months.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Barclays Bank UK PLC, all decisions | 11,208 | 21% |
| Irresponsible lending, all decisions | 30,675 | 37% |
| Mortgage, all decisions | 24,695 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website