National Westminster Bank Public Limited Company · DRN-5856644

The complaint A limited company, which I’ll refer to as ‘S’, is unhappy that National Westminster Bank Public Limited Company (“NatWest”) defaulted its Bounce Back Loan and closed its account without it having received the warnings NatWest says it sent. S’s complaint is brought to this service by its director, whom I’ll refer to as ‘Mr L’. What happened S held a business current account and a Bounce Back Loan (“BBL”) with NatWest. The contractual payment obligations for the BBL included that payments were due monthly, but several payments weren’t made by S during 2022, 2023 and 2024, such that the loan fell into arrears. As the loan arrears increased, NatWest began contacting S to ask it to bring the account back up to date. NatWest’s notifications included text messages sent to the mobile number they held for S, and letters posted to S about the arrears. In September and October 2024, because of the prolonged and unresolved nature of the BBL arrears, NatWest sent arrears letters and then a formal demand for full repayment of the loan to S. These letters were sent to the trading address that appeared on NatWest’s systems at the time. That address had been confirmed to NatWest by S through a “Know Your Customer” (“KYC”) process completed by Mr L in July 2024, following a change to the company’s registered office address at Companies House earlier that year. When the formal demand expired with S having not made payment or engaged with NatWest about the BBL, NatWest defaulted the loan, closed the business current account, and transferred funds from S’s business account balance to the BBL under their right of set-off. NatWest then passed the remaining BBL balance to their recoveries team, who later instructed an external debt collection agency (“DCA”). Mr L says that he was unaware of the arrears and of the letters NatWest say they sent, which were sent to an incorrect address (a previous trading address). Mr L says he had updated the company’s correspondence address with NatWest in 2022 and again in 2024, and that statements were being sent to his home address without issue, and says he wasn’t expecting letters to be sent to the previous trading address, especially as the company had vacated those premises in mid-2024. Mr L accepts that he received text messages from NatWest but says he thought they were marketing messages and did not realise they related to arrears on the BBL. After the account was closed, Mr L complained to NatWest on S’s behalf. NatWest responded to S but didn’t feel that they’d done anything wrong and didn’t uphold the complaint. They said they had contacted S several times, that the letters were sent to the trading address they held for the business as supplied by Mr L in the KYC update, and that the correct processes were followed when the arrears weren’t cleared. Mr L wasn’t satisfied with NatWest’s response, so he referred S’s complaint to this service. One of our investigators looked at this complaint. But they didn’t feel that NatWest had acted

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unfairly towards S as Mr L contended and didn’t uphold the complaint. Mr L didn’t agree, so the matter was escalated to an ombudsman for a final decision. 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. Mr L has raised concerns about the address NatWest used when they sent arrears letters and the formal demand. However, I’ve seen that in July 2024, during a routine “Know Your Customer” check, prompted by a change to S’s registered office address at Companies House, NatWest asked S to confirm its trading address. Mr L confirmed the trading address at that time, and NatWest then updated their records to reflect the information provided. NatWest’s actions seem reasonable to me, and I can think of no reason why NatWest shouldn’t have relied on the details Mr L supplied during the KYC update process. And if S was no longer operating from that address, it was Mr L’s responsibility as the director of S to ensure NatWest were told this and that S’s address with NatWest was updated. But there’s no evidence that Mr L gave NatWest any different address information for S before the arrears and default action took place. However, even if I were to assume for the sake of argument that the address used by NatWest for the letters was in some way wrong, this wouldn’t change my overall decision here. This is because, as the director of S, Mr L was responsible for ensuring the BBL was being managed properly, including monitoring repayments and being aware of any payments that were missed and the ongoing position of the loan. In this instance, loan payments were not being made for a significant period in 2022, 2023 and 2024. I feel that Mr L should reasonably have been aware of this and should have checked the account and noticed that BBL instalments weren’t leaving the account as expected, regardless of whether arrears letters were being received or not. NatWest also attempted to contact S in other ways, including by email and text message. And NatWest have shown that these notifications were sent to the email address and phone number that Mr S has provided to this service as being his, and which he has used to correspond with this service. I therefore feel that it’s more likely than not that Mr L received those emails and text messages. Indeed, Mr L has acknowledged that he did receive text messages from NatWest but says he thought they were marketing messages and did not read or act on them. I appreciate that businesses may receive promotional messaging from time to time, but these particular messages clearly referred to the account being in an unsatisfactory position and asked S to contact NatWest urgently. I don’t think it was reasonable for Mr L to disregard these texts or assume they were unrelated to S’s borrowing. If Mr L did so, that was a mistake on Mr L’s part and not any form of mistake on the part of NatWest. Ultimately, a business director is expected to maintain oversight of the company’s finances and borrowing commitments, irrespective of whether notices are received from its bank or not. Because the BBL arrears remained unresolved and outstanding, NatWest followed the process set out in the loan terms. They issued a formal demand, waited for it to expire, then defaulted the loan, exercised their right of set-off, and transferred the remaining loan balance to their recoveries team. These are the steps I would reasonably expect a lender to take where arrears have remained outstanding for some time and the business has not engaged with attempts to resolve the matter in any meaningful way. I understand that the closure of the business account caused significant difficulty for S, and

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that Mr L feels this outcome could have been avoided if correspondence had been sent to his home address. But the primary issue here is that loan repayments were repeatedly missed, and that S did not contact NatWest or take steps to address the situation until after recovery action had been taken. And, in these circumstances, I don’t feel that NatWest acted unfairly or unreasonably by taking the action that they did. All of which means that I won’t be upholding this complaint or instructing NatWest to take any further or alternative action. I realise this won’t be the outcome Mr L was wanting, but I hope he will understand, given all that I’ve explained and the impartial role of this service, why I’ve made the final decision that I have. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask S to accept or reject my decision before 28 April 2026. Paul Cooper Ombudsman

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