TSB Bank plc · DRN-6262299

The complaint Mr S complains that TSB Bank plc lent to him irresponsibly and the affect the subsequent collections activity has had on him. What happened Mr S had a credit card with TSB since October 2001. It’s not clear what the opening credit limit was or if it was increased, but in 2015, the credit limit was £13,000. In October 2015, TSB agreed a loan of £13,000 for Mr S to repay his credit card. While the loan was used for that purpose, TSB didn’t remove or reduce the credit limit. Instead Mr S says it later increased the limit to £14,950. Mr S fell into difficulty with the loan and the credit card and in October 2019, TSB issued default notices on both accounts. On 14 February 2025, Mr S complained to TSB. He said the lending was never really affordable for him and as a result, he and his wife have endured “years of stress and anxiety” and “the whole experience has been an unnecessary nightmare”. TSB considered the complaint, but said it had been brought too late under the rules set by the Financial Conduct Authority (FCA) as more than six years had passed since the lending was agreed. Mr S didn’t accept TSB’s response, so he asked our service to look into the complaint. One of our investigators did so. He felt it was reasonable to consider the complaint as being about an unfair relationship as described in Section 140A of the Consumer Credit Act 1974, so he felt it was one we could consider. He went on to do so but didn’t uphold the complaint. Mr S didn’t agree with our investigator so the complaint was 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. Having done so, I reached a different conclusion from that of our investigator, so I issued a provisional decision saying: “There are rules about complaining to our service which are set out in the FCA’s Handbook – specifically in the Dispute Resolution Section (DISP). TSB says Mr S has brought his complaint outside the time limits set by DISP 2.8.2 which says the ombudsman cannot consider a complaint if it is referred to us more than six years after the event complained of. As the credit card and loan were agreed more than six years before Mr S brought his complaint, I understand TSB’s point here. While I don’t agree with the bank on this point, my focus for this decision will purely be on events that have taken place within six years of Mr S’s complaint. In other words, I am only looking at TSB’s acts or omissions since 14 February 2019, and there is no dispute that I have the power to do that. Where I refer to earlier events it is for background purposes, but my focus is on later events.

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I have spoken to Mr S and explained that even if I were to uphold his complaint in full, I would only be able to refund charges and interest levied on the accounts within the six years from when he raised his complaint. The accounts were defaulted in late 2019 and interest and charges were no longer levied from that point. So the most I would be likely to award would be a refund of charges and interest between February 2019 and the end of that year. I explained to him that if I were to do that, any award would be offset against the amount he still owes TSB – somewhere in the region of £21,000 – so he wouldn’t receive any money back himself. Mr S understood that point. But his main concern is the distress caused by TSB and its agents in chasing him for the outstanding money. As the defaults were issued in late 2019, it’s clear that the collection activity he refers to all took place in the six years prior to his complaint on 14 February 2024. And as debt collection is a regulated activity, there can be no doubt that I have the power under our jurisdiction to look at this element of his complaint. Following my conversation with Mr S, I’ve asked TSB informally to consider whether it would be prepared to cease collection activity against Mr S. Unfortunately however, it hasn’t responded despite being given ample opportunity to do so. It did say it thought this was a new complaint point and offered to investigate it. But I don’t agree – I think it clearly formed part of the complaint raised. I think delaying things further by allowing another investigation will only cause further distress to Mr S. Mr S feels that the money was lent to him irresponsibly. Had, at the very least, TSB greatly reduced the limit on the credit card after it refinanced that debt onto the loan, then things may have been different as he wouldn’t have had two monthly repayments to find. Mr S calculated that over the years the accounts were active, he paid around £13,100 in interest alone – roughly equal to the amount of credit that was transferred from card to loan in 2015. So against that backdrop, I understand why the chasing is causing him distress. I asked Mr S about his circumstances. He tells me he was forced to give up work due to ill health and disability many years ago and he’s lived on benefits since. He lives on a reduced state pension of around £400 per month, and he receives a similar amount in benefits. He tells me his rent (shared with his wife) alone is around £860. Mr S says TSB has moved the debt around different departments and at least four different collection agencies who all contact him and cause distress each time. It’s not that Mr S doesn’t want to repay the money he borrowed, he simply doesn’t have the means to do so. Given Mr S’s age, health and financial situation, it is extremely unlikely that he’ll ever be in a position to repay the money TSB is seeking from him. I don’t dispute that TSB is within its rights to continue to chase Mr S for repayment. He did, after all, borrow the money and has spent it, and ordinarily I’d agree that it’s right he should repay it. In view of the particular circumstances here, there’s no dispute that Mr S owes TSB the money he’s borrowed, but what I need to decide is whether it’s fair and reasonable for it to continue to pursue him for the repayment of that money. I’m satisfied there’s little prospect of Mr S being able to repay the outstanding amount and requiring him to do so would cause undue financial hardship. So I think a fair way to resolve the complaint is for TSB to cease recovery action against him for both the loan and credit card debts.” Mr S accepted my provisional decision. TSB provided further comments. It said (in summary):

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• It had brought the account ‘back in house’ from debt collectors in September 2024 and hadn’t chased since; • While it agreed not to request payment from Mr S for the outstanding balances in future, it has said it is obliged to send Notice of Sums in Arrears (NOSIA) letters every six months. These are not however, requests for payment. I thank TSB for its response and am pleased to see it has agreed not to ask Mr S for any further payment to the balances of the accounts. With regards to the NOSIA letters, TSB is correct that the Consumer Credit Act 1974 obliges creditors to notify debtors of arrears at least every six months. I acknowledge that, and remind Mr S that these are not requests for payment; he can safely ignore them. That said, TSB has acknowledged that Mr S is vulnerable and cannot afford to repay the outstanding sums. This is unlikely to change in future. It could simply write off the debt and not then have to send Mr S any letters at all. But that is for TSB to decide as it is not something I can tell it to do. I do think however, it would give Mr S relief and peace of mind if that were to happen, and would not cause any detriment to TSB in the circumstances. Given the responses to my provisional decision, I see no reason to depart from it. My final decision My final decision is that I uphold this complaint. TSB Bank plc should cease recovery action against Mr S for both the loan and credit card debts. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 28 April 2026. Richard Hale Ombudsman

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