National Westminster Bank Public Limited Company · DRN-5755023

The complaint A limited company, which I’ll refer to as ‘V’ complains that poor communication and use of an outdated address by National Westminster Bank Public Limited Company (“NatWest”) led to repayment difficulties following a temporary loan-repayment arrangement, ultimately resulting in unexpected arrears, account closures and the set-off of funds. V’s complaint is brought to this service by its director, whom I’ll refer to as ‘Mr P’. What happened V held a Bounce Back Loan (“BBL”) and a Small Business Loan (“SBL”) with NatWest. In May 2024, Mr P asked for temporary repayment support on V’s loans while he was recovering from surgery. NatWest agreed to a three-month deferral of the loan repayments, and during a call on 29 May 2024 they explained to Mr P that arrears would build during this period and that Mr P would need to contact NatWest at the end of the arrangement to discuss clearing the arrears or provide financial information for V so the bank could assess affordability. NatWest also sent written confirmation of the arrangement to the address it held for V. When the deferral ended, Mr P didn’t contact NatWest to discuss the arrears. NatWest attempted to engage with V about the arrears, but because the address on V’s business banking profile included an outdated address, the written notices NatWest sent, including notices warning that recovery action might follow, went to V’s old business address and were not received by Mr P. V’s loans remained in arrears, and NatWest later issued Formal Demands and 60-day closure notices to the outdated address. After the notices expired without response, NatWest closed V’s business accounts and used the remaining balances to reduce the loan debt. The outstanding balance was then passed to a third-party debt-recovery agency. V repaid the loans in full shortly afterwards. Mr P complained to NatWest on V’s behalf several times during this period, saying it had been difficult to restart repayments after the deferral and that the bank hadn’t answered requests he’d made for the arrears figures. NatWest responded that V needed to telephone for those figures and that, without financial information, it couldn’t agree a repayment plan. NatWest acknowledged some delays and service issues and paid V a total of £200 in compensation but didn’t feel that it had done anything wrong by closing V’s accounts or using money available in V’s business current account to offset its loan debt. Mr P wasn’t satisfied with NatWest’s response, so he referred V’s complaint to this service. One of our investigators looked at this complaint. But they didn’t feel that NatWest had acted unfairly towards V in the manner Mr P contended and felt that the compensation NatWest had issued for the service mistakes already provided a fair outcome to those aspects of V’s complaint. Mr P didn’t agree, so the matter was escalated to an ombudsman for a final decision.

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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 want to start by acknowledging that this was a very difficult period for Mr P. He was recovering from surgery, trying to manage a small business on limited capacity, and at the same time attempting to deal with uncertainty around V’s loan repayments. I can appreciate why the events that followed felt extremely stressful and why the eventual closure of V’s accounts came as such a disappointment. It’s also clear that NatWest didn’t handle everything perfectly, and there were points where its communication could have been clearer or more helpful. However, having carefully considered everything, I don’t feel that NatWest acted unfairly in a way that means it needs to do anything more than it already has. NatWest agreed to provide short-term support to V by deferring repayments for three months. During the call on 29 May 2024, NatWest explained to Mr P what that support involved. Mr P was told that arrears would build during the deferral period, and that he would need to contact the bank at the end of the three months to either clear those arrears or provide financial information so the bank could decide on an affordable way forward for V. NatWest then followed that call up with written confirmation. I’m therefore satisfied that V was told what it needed to do, and by when. When the deferral ended, Mr P didn’t contact NatWest as required. And because V’s business address hadn’t been updated, the letters NatWest sent about the arrears and the possible consequences didn’t reach him. I’ve thought carefully about this point, because I recognise Mr P genuinely didn’t know NatWest was sending those letters, and I also acknowledge that NatWest missed opportunities during later calls and emails to realise it was using an outdated business address. But the responsibility for keeping V’s business details up to date rested with V. And NatWest was required to send important notices to the address it had on the business profile. In consideration of these points, I don’t feel it was unfair for NatWest to rely on that address when deciding how to communicate those notices. I’ve also looked at Mr P’s concern that NatWest didn’t give him the arrears figures when he asked for them. I accept he found it difficult to get through on the phone, and NatWest has already compensated V for some of the delays and poor service Mr P experienced. But it wasn’t unreasonable for NatWest to require a telephone call to provide those figures, and I don’t feel its request for financial information was unfair either. That was a normal part of the process for agreeing a repayment plan, and NatWest couldn’t set one up without the information it asked for. So, while I appreciate that it would have been inconvenient for Mr P to speak with NatWest, given the hold times he experienced, I feel that the onus rested with Mr P to accept that inconvenience and provide the information that NatWest required. Furthermore, while Mr P didn’t have the precise arrears figures, that didn’t prevent him from making a good-faith payment towards the arrears or from maintaining the dialogue with NatWest in the way he had been advised. Customers aren’t expected to guess arrears balances, but they are expected to take reasonable steps to prevent matters escalating, for example, by making partial payments or persisting in contacting the bank through the required channels. Had V taken those steps, it is likely the arrears position would have been brought into sharper focus before NatWest needed to consider recovery action. However, by December 2024, V’s loans were several months in arrears. NatWest had issued the required notices warning that it might ask for the full balances to be repaid and that it might close V’s accounts and use any available funds to reduce the debt. When it

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didn’t receive a response, it went on to take those steps. Although I appreciate how sudden and distressing this felt from Mr P’s perspective, I don’t feel NatWest acted outside the terms of the lending agreements or outside what would be considered fair in the circumstances. It also needs to be remembered that Mr P knew that V’s loans were in arrears, and he had been told by NatWest that those arrears would need to be addressed. That said, NatWest wasn’t without fault. As I’ve mentioned, it missed opportunities to spot that it was using an outdated business address, its communication wasn’t always as responsive or consistent as it should have been, and its call-handling fell short of expectations at times. But NatWest recognised those issues at the time and paid V £200 in compensation. That’s in line with what I would usually expect for the types of service mistakes NatWest made, and I feel it fairly reflects their impact. Ultimately, while I acknowledge the difficulties Mr P experienced, I don’t feel NatWest needs to do anything more. The core reasons the matter escalated in the way it did were V’s failure to take the steps NatWest had explained were necessary at the end of the repayment deferral and to update its business address. NatWest’s own shortcomings made an already difficult situation harder for Mr P, but they didn’t cause the main outcome he’s complained about. All of which means that I won’t be upholding this complaint or instructing NatWest to take any further or alternative action. I hope that Mr P will understand, given what I’ve explained and the impartial position 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 V to accept or reject my decision before 1 April 2026. Paul Cooper Ombudsman

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