Partially upheld: Mortgage administration / arrears handling complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Mr B, who suffered a life-changing spinal injury preventing future work, requested that Halifax write-off his loan balance in October 2025. Halifax initially placed a hold on the account and froze interest, then declined the write-off request without clearly explaining that an income and expenditure assessment would be required to consider appropriate forbearance options. The ombudsman found that while Halifax was entitled to decline the write-off request and require financial assessment, the firm should have communicated this requirement explicitly from the outset. The ombudsman upheld the complaint in part, awarding £100 compensation for the distress caused by the delay and lack of clarity, and reminding Halifax to treat Mr B positively and sympathetically when considering forbearance options, which could include full or partial write-off depending on updated affordability assessment.

The Ombudsman's reasoning

While Halifax was entitled to assess the write-off request against its policy and decline it, the firm should have explicitly communicated from 25 October 2025 that an income and expenditure assessment would be required to consider appropriate forbearance options. The delay in providing this clear guidance created unnecessary uncertainty and distress. Requiring such an assessment before determining forbearance options, including potential write-off, is not contrary to FCA requirements for treating vulnerable customers fairly. The firm must now treat Mr B positively and sympathetically when considering forbearance options, which could include full or partial write-off depending on updated affordability assessment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website