Healthcare Finance Limited · DRN-6215167

The complaint Miss W complains that Healthcare Finance Limited (‘HFL’) mishandled her loan account with it. I note a difference business has answered the complaint and been involved, but for ease of reading I will just refer to HFL throughout this decision. As that’s the business ultimately responsible for the complaint. What happened In December 2024, Miss W purchased dental treatment from a company I’ll call ‘B’. The total cost of the treatment was £8,656. Miss W paid a £285.56 deposit, and the remaining amount was financed by a fixed sum loan agreement provided by HFL. Under the terms of the loan agreement Miss W was required to make 35 monthly payments of £285.40 to fully repay it. Shortly afterwards, Miss W made a £600 ad-hoc repayment towards the loan. In August 2025, Miss W contacted HFL to explain she was experiencing financial difficulties. She therefore asked for her repayments to initially be reduced to £150 a month. HFL responded and said Miss W’s loan was a fixed term agreement, which meant the repayments must be completed within the loan term. HFL said while it can’t extend the loan term, it can review requests for reduced payments due to financial difficulty. It was added that payment plans are a temporary relief that last for three months. After the plan ends HFL said it would ask for extra each month so payments can be caught up ensuring the loan is still fully repaid on the original end date. Miss W initially said this was fine as she had made an additional payment of £600 in December 2024. So, if payments were lowered to £100 (the new reduced amount she wanted to pay) a month, that additional £600 payment would cover things. Miss W therefore asked for payments to be reduced to £100 for September, October and November 2025. HFL explained the £600 shortened the duration of the loan, but it wouldn’t change the amount that still needed to be repaid each month. HFL also repeated what it had said about payments plans being for three months and extra each month would be needed after the plan ended to cover the arrears. Miss W was asked to email to confirm that she wished to proceed with the payment plan of £100 for the next three months. Miss W said the loan term had been shortened, so not paying the full amount and then going back to normal payments is still covered. Given this she agreed to the payment plan and HFL confirmed it had been set up. In September 2025, Miss W contacted HFL to say the full payment had been taken. HFL responded and said as per its communication on 12 August 2025, it isnt able to stop automatic attempts for payments. Miss W was advised to contact her bank who may be able to reverse the transaction. Miss W was able to resolve the matter, and it seems the payment was quickly returned to her. In November 2025, Miss W contacted HFL to say as it had made the loan term shorter when she made the £600 overpayment, it should be able to now put the loan back to its original due date. This would ensure the account is up to date. HFL replied and said the £600 was an ad-hoc repayment and it’s unable to amend the loan date once this payment had reduced the term. Miss W said HFC was picking and choosing when to agree to amend the dates and the loan would stay in arrears as she wasn’t able to afford to pay extra.

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HFL said the £600 payment didn’t create a ‘credit’ on the loan account which could be used later to replace late or missed payments. It reduced the overall balance instead. HFL also asked Miss W to contact it to discuss her finances and agree on a subsequent plan for the remaining arrears. Unhappy with this, Miss W logged a complaint. HFL issued a final response and said when an early repayment is made, the outstanding loan balance is reduced. As a result, interest that would’ve accrued over the remaining term is also reduced. HFL repeated that early repayments can’t be used later to offset any shortfall arising when contractual repayments are not maintained. HFL added this had been explained to Miss W before she agreed to the temporary repayment plan. Unhappy with this, Miss W referred her complaint to the Financial Ombudsman Service. One of our investigators considered the complaint and didn’t believe HFL had treated Miss W unfairly. They said given the terms of the loan agreement, HFL had acted correctly in how it applied the overpayment Miss W made in December 2024. This wouldn’t act as any sort of ‘credit’ balance that could be used later for future payments. The investigator also said HFL had been clear in its communication with how the payment plan would impact the loan/arrears. And they were satisfied HFL had met its obligations under the Consumer Credit Sourcebook (CONC). Miss W didn’t agree and said she understood the explanation regarding the £600 overpayment, but her main concern was the fairness of how her financial difficulties were handled. The only option offered was a short-term repayment plan that allowed for arrears to continue to build up which wasn’t suitable for Miss W circumstances. So, Miss W didn’t feel sufficient forbearance was given. As Miss W didn’t agree, the complaint has 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 point out I’ve read and considered the whole file, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on any specific point, it’s not because I’ve failed to take it on board and think about it but because I don’t think I need to comment on it in order to reach what I think is the right outcome. It seems like Miss W accepts the explanation given by the investigator regarding how the £600 overpayment was applied. But for completeness, I also agree with what the investigator has said and for broadly the same reasons. The terms are clear that an early partial repayment will reduce the term of the agreement. So, the £600 Miss W paid in December 2024 was correctly applied to the loan balance. By doing so the loan will reach the end date sooner than was originally scheduled, which is exactly what the terms allow for when partial overpayments are made. I do appreciate Miss W point that given the loan term was reduced by the overpayment, can’t it just be increased again to bring the account back up to date. But ultimately that kind of amendment isn’t permitted under the loan terms, which Miss W agreed to be bound by. Miss W doesn’t believe HFL treated her fairly and in line with its obligations under CONC. She says that HFL only offered a short-term payment plan that still allowed for arrears to build up. This wasn’t suitable for her situation. HFL has a duty to treat customers in financial difficulties sympathetically. CONC says a firm should treat customers with forbearance and due consideration. CONC also outlines actions a lender needs to consider in such situations. Here HFL says it did that by offering to accept reduced payments for a three-month period.

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While there are potentially other things HFL could’ve considered when deciding how to assist Miss W while she was in financial difficulty. It wasn’t obliged to offer these. Accepting reduced payments is in line with an example given in CONC for treating customers with forbearance and due consideration. So based on the situation at the time, I’m satisfied that HFL acted in line with the requirement to treat customers in or approaching arrears fairly by offering to accept reduce payments. I know Miss W feels HFL should’ve considered an arrangement that perhaps lasted longer than three months. But I’m not persuaded here at the time Miss W contacted it to say she was having difficulties financially that was something HFL had to do. Miss W initially approached HFL and asked to pay £150 a month (this was then reduced to £100) which was agreed by HFL. Miss W then accepted the payment plan for the three-month timeframe. So, I don’t believe HFL needed to do anything given the circumstances at that time. HFL also clearly explained payment plans are set over three months and how the plan would impact the loan. Miss W was consistently advised before accepting the plan that arrears would continue to accrue and would need to be cleared within the original loan terms. HFL wasn’t under an obligation to suspend arrears while the repayment plan was in place. Ultimately these arrears amount are legitimately owed as per the loan agreement. I can see that HFL has offered Miss W the option of repaying her arrears monthly by agreeing a plan. This is in line with what I would expect. The £600 has been applied correctly to reduce the loan term and can’t be used as a form of future ‘credit’ to repay missed payments or arrears amounts. Additionally, Miss W approached HFL for help with her payments while in financial difficulties. It offered to accept the reduced amount Miss W offered, which is in line with what’s detailed in CONC. The implications of this were clearly explained and accepted at the time by Miss W. So overall I’m satisfied HFL has acted fairly in its dealings with Miss W on this complaint. If Miss W is still experiencing difficulties, then the requirement for HFL to treat Miss W with forbearance and due consideration remains relevant. That may now mean that a greater level of support is required. I would like to remind HFL of this in any potential future dealings it may have with Miss W regarding her loan account. My final decision I don’t uphold Miss W’s complaint against Healthcare Finance Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss W to accept or reject my decision before 25 May 2026. Paul Blower Ombudsman

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