DRN-6048357

The complaint Miss P complains about a default recorded with the credit reference agencies by NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY (NatWest). What happened Miss P held a loan account with NatWest and started experiencing financial difficulty in or around April 2020 due to Covid. Between May and September 2020, NatWest granted Miss P a payment holiday and it was agreed that no adverse information would be recorded on her credit file for that period. Miss P then complained about a default having been recorded on her credit file for April 2020 and NatWest said that this had been recorded correctly but as a gesture of goodwill, it brought this month into the payment holiday arrangement. At this time, it was also agreed that the loan would be extended by 6 months to account for the lack of payments made during this time. Miss P also complained about the loan extension paperwork not having been sent to her and NatWest admitted to some errors regarding this at that time. Numerous complaint response letters were sent to Miss P, with the last one having been sent to her on 26 March 2021. In July 2021, after the payment holiday had ended, Miss P missed a repayment towards the loan. She contacted NatWest about this and was asked to complete an income and expenditure assessment. This showed that she had no affordability. NatWest has said that at this time, it was unable to offer another term extension due to the arrears on the account, and this decision was communicated to Miss P. In August 2021, NatWest issued a pre-default letter to Miss P. In October 2021, a formal demand letter was issued followed by the account having been defaulted and passed to a third party later the same month. Miss P did not contact NatWest during this time. In June 2025, Miss P reached out to NatWest to raise a complaint. She said she was unhappy that the default was registered on her credit file and she was not notified before it was applied. She further complained about how long it took to resolve her complaint. NatWest reviewed matters and said that as Miss P missed a further payment after her payment holiday period had ended, she was no longer eligible for a term extension, and a repayment plan was discussed. NatWest said it didn’t receive all the information it needed from Miss P to agree the repayment plan and the account was subsequently defaulted. NatWest confirmed it did send out the required defaults letters to Miss P before recording the default with the credit reference agencies. On the matter of the length of time it took to resolve the complaint, NatWest acknowledged it could have done better and offered Miss P £50 in compensation. Miss P then brought her complaint to our service. She brought a complaint concerning defaults applied to this loan account and an overdraft on a current account, however our investigator said that on this complaint we will consider the loan account only.

-- 1 of 3 --

On review, our investigator said we could not consider any of the matters which were covered in the final response letters issued in 2021 as they had not been brought to us in time, including the matter of the missing loan extension paperwork. Our investigator said NatWest did issue default notices/letters to the address it had for Miss P. She further found it was reasonable of NatWest to apply the default in the circumstances. Miss P disagreed and asked for an ombudsman to consider her complaint. She said she had not received any letters, and NatWest had admitted to having issues with sending letters at the relevant time. Miss P says that the lack of paperwork issued to her shows NatWest’s failure to support a vulnerable customer. So, the complaint has now been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I would like to start by saying that I have provided a brief summary of the events that occurred. I intend no discourtesy by this and can assure both parties that I have taken all the information provided into consideration when reaching a decision on this complaint. In this decision, I’ll concentrate my comments on what I think is relevant. If I don’t comment on a specific point, it’s not because I’ve failed to consider it, but because I don’t think I need to comment in order to reach a fair and reasonable outcome. Our rules allow me to do this, and this reflects the nature of our service as a free and informal alternative to the courts. It seems that Miss P’s main concern is that she was not issued with letters informing her about the default and as such, she does not feel she was supported as a vulnerable customer so I will focus on this. Before I do, I will note that after the payment holiday had ended, Miss P missed a further payment in July 2021. At this time, NatWest requested income and expenditure information and found Miss P could not afford to make the repayments any longer. NatWest says that due to the lack of ongoing affordability and the arrears on the account, it could not offer a term extension. I find this decision to be reasonable in the circumstances and due to the accumulated number of missed payments on the account at that time, it was fair and reasonable for NatWest to proceed with providing a default notice. NatWest’s system notes show us that the letters required to be issued before a default is recorded were indeed sent to Miss P in August and then in October 2021. These letters were sent to the address NatWest had recorded for Miss P at the relevant time. If Miss P did not receive the letters due to postal issues or because she had moved address and not informed NatWest about that, it would not be reasonable for me to hold it liable for her not having received them. Miss P says that NatWest admitted to her that it was having trouble with its letters at the time. I do need to be careful here as the lack of correspondence she was receiving in relation to her loan extension was covered in a final response letter which has not been referred to us, and if it was, would likely be out of time for us to consider it. So, I will not comment on Miss P not receiving the loan extension letters. All I will say is that there is no reason for me to believe that the issues NatWest experienced would have extended to the default letters. There is no evidence or information available that makes me think these would not have been sent and so I find it highly likely the letters were issued by NatWest as required.

-- 2 of 3 --

In fact, I can see that three days after the default was recorded, Miss P called in and was informed over the telephone that her account was now in recoveries. During this call, Miss P made mention of having changed her address and I can see that no more than five days after the default was recorded, Miss P’s address was changed on the system. I find this to be a much more relevant to why Miss P says she did not receive the letters than NatWest having had issues in sending out its post. I appreciate that Miss P feels let down by NatWest during what was a period of financial difficulty and uncertainty for her. I empathise with the situation Miss P found herself in but having considered the decision to default the account, the issue of the default letters, and any errors in complaint handling, I find that NatWest has treated Miss P in a fair and reasonable manner overall. My final decision My final decision is that I do not uphold Miss P’s complaint against NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss P to accept or reject my decision before 26 May 2026. Vanisha Patel Ombudsman

-- 3 of 3 --