Bank of Scotland plc trading as Halifax · DRN-6117339

The complaint Mr A complains that Bank of Scotland plc trading as Halifax (Halifax) has caused delays in him being able to redeem his mortgage account, which has resulted in further interest being charged, solicitors being instructed and their costs being added to the account. What happened Mr A took out an interest-only mortgage with Halifax in September 1998. The term was for 25 years and expired on 31 August 2023, at which point repayment of the balance was due. The redemption figure as of that date was £52,338.46. Mr A planned to repay the mortgage using funds from an endowment policy, which matured in September 2023. However, there was a delay in receiving these funds due to the endowment provider and they were not received until August 2024. Mr A says that he contacted Halifax in December 2024 to request a redemption statement so that he could pay off his mortgage after receiving the endowment funds but says that he did not receive a response until July 2025 after he had made a complaint. During this time, interest has been charged and Halifax has instructed solicitors and added their costs to the mortgage account. In his complaint to this Service, Mr A said that he would like Halifax to remove the interest and charges accrued since December 2024 so that he could redeem the mortgage using the same balance he would have needed to pay had he received the redemption statement when he first requested it. Halifax acknowledged that it had caused some delays with Mr A redeeming his mortgage and offered to cover some of the interest and fees charged to his account. It was Halifax’s understanding that the endowment provider had also caused some delays in releasing the funds and had agreed to pay the interest on the mortgage for the period that Mr A was deprived of the funds. Halifax agreed that if Mr A repaid the mortgage by the end of August 2025, it would redeem the account on the basis that the funds were received in December 2024 and waive any interest or fees charged since then. Halifax has also paid Mr A compensation totalling £285 in relation to the complaints he has made regarding this issue and the service received in respect of the distress and inconvenience caused. Our Investigator looked into Mr A’s complaint and didn’t think Halifax needed to take any further action. Our Investigator thought that Halifax’s offer was fair as it would essentially be putting Mr A back in the same financial position he would have been in had no delays occurred with either the endowment policy provider releasing the funds of Halifax providing the redemption statement. He was also of the view that the £285 offered in respect of the distress and inconvenience caused by the delays (along with other issues raised) was fair and in line with this Service’s approach. Mr A disagrees with this, so the case has come to me to make a decision. He says that his first formal request for a redemption figure was on 14 December 2024, and not on 22 November 2024. He says that he made a follow up call on 16 December to make sure it had been sent and then called again on 2 January 2025 as he hadn’t received anything. He says that he called Halifax every month making the same request without response. Mr A says that he made numerous attempts to clarify the amount and make a part payment. Mr A

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says that he no longer has the full amount available and that he made Halifax aware of this in April 2025. Mr A refers to the Investigator setting out in his view that that it was his understanding that the endowment provider had agreed to cover charges and interest between 30 August 2023 and December 2024. He says that this was not checked and that due to the time which has passed, the endowment provider was unlikely to accept the arrangement to cover the costs. Mr A therefore says that he has missed out on a fair compensation offer from the endowment provider due to Halifax. Mr A has also complained Halifax has added legal fees to his account in October 2025. 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 looked at the evidence, I agree with the Investigator’s view for broadly the same reasons, and I've explained this further below. I’ve given careful consideration to all the submissions made by both parties, but I won’t address each and every point that has been raised. I’ll focus on the matters that I consider most relevant to how I’ve reached a fair outcome in keeping with the informal nature of our Service. Whilst I can appreciate that Mr A is frustrated with the ongoing situation, this complaint relates to Halifax’s actions up until July 2025, when it provided its final response in respect of the delay in Mr A being able to redeem his mortgage. The issues in relation to the endowment provider no longer agreeing to cover Mr A’s costs and the further legal fees in October 2025 have been raised more recently and do not form part of this complaint, therefore I will not be commenting on them in this decision. If Mr A wishes to raise further complaints about these aspects then they will be new complaints (against either Halifax or the endowment provider) in order to given them the opportunity to investigate these issues and provide a response. I can see that Mr A’s mortgage was in arrears prior to the expiry of the term in August 2023. In July 2024, Halifax was informed by a third party on behalf of Mr A was due to receive endowment funds which would cover more than the mortgage balance. The third party was advised that a redemption figure could be provided to redeem the mortgage at that stage. I have seen correspondence from the endowment provider which indicates that it transferred £57,163.79 into Mr A’s account on 12 August 2024, which included interest of £1,971.57 on top of the £55,192.22 maturity value of the policy. Mr A complained to the endowment provider about the delay, and I can see that it provided a final response to his complaint on 3 September 2024. Due to the late payment, it agreed to pay additional simple interest of 8% from the date of maturity on 11 September 2023 to the date the claim was paid on 12 August 2024, which amounted to a further £3,393.77. The endowment provider also paid Mr A £500 in respect of the trouble and upset caused. It also noted that Mr A had been paying interest to his mortgage provider and requested proof of Mr A’s outgoings in respect of this so it could look into further compensation. On 16 September 2024, the third party informed Halifax that the endowment funds were in Mr A’s bank but that these could not be sent as he was in hospital, so this would be done once he had recovered. Although Mr A says that he first contacted Halifax for a redemption statement in December 2024, the contact notes indicate that he contacted Halifax on 22 November 2024

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to inform it that he had now received the endowment funds and requested a redemption figure. He also said that the endowment provider wanted a breakdown of any costs incurred during the period that the redemption had been delayed as they were going to cover these. Following Mr A’s request on 22 November 2024, Halifax issued a redemption statement to his home address with a redemption figure of £58,050.01 based on a repayment date of 29 November 2024. However, it was returned to Halifax. I have seen a copy of the statement and am satisfied that this was sent to Mr A’s correct address, so it is not clear why it was returned. However, I can’t hold Halifax responsible for the fact that this was not received. The contact notes indicate that Halifax spoke with the third party on 2 January 2025, and the agent confirmed that if they required another redemption statement, Mr A would need to call and request this. In April 2025, Halifax instructed solicitors to commence litigation action, given that the term had expired over 19 months earlier, it had not received a full monthly payment since November 2022, and the balance was increasing every month due to unpaid interest. Although it was aware that the endowment funds had been received by November 2024, no payments had been made in respect of the mortgage, and it believed that no further requests had been made for a redemption figure. Against this background, I don’t think it was unreasonable of Halifax to have commenced legal action as it could not allow the situation to continue indefinitely. I also note that Halifax agreed to cover the legal costs added to the account for this period, which I think was fair in the circumstances. Following receipt of the letter confirming commencement of legal action, Mr A contacted Halifax for a redemption figure on 9 April 2025 and legal action was put on hold, with the hold ultimately extended until the end of September 2025. I can see that in April 2025, Halifax explained to the third party that the sooner the balance was paid off, the less interest Mr A would need to pay. Halifax also said that Mr A should speak with the endowment provider to clarify how it would deal with the extra fees and interest charged by Halifax. I can see that Halifax contacted Mr A (via the third party) on 22 May 2025. Mr A said that he was looking to make a payment towards the balance and that if there was a shortfall he would look at options to cover that. He also wanted to know what fees, charges and interest had been charged on the account since the term expiry, which he said was required for the endowment provider due to the error it made. Mr A said that he wanted this first before paying anything off the balance. Halifax explained that there was nothing stopping Mr A from paying a lump sum towards the account and addressing the remaining balance later and that there was no need to wait for the paperwork for the endowment provider. On 7 June 2025, Mr A contacted Halifax (via a third party) and said that he had received an interim statement, but this didn’t show the information he had asked for. I can see that in its final response of 18 July 2025, Halifax provided Mr A with the monthly interest costs since the term had expired, which he had requested to pass on to the endowment provider. The final response also set out that Halifax would honour the redemption figure from December 2024 (amounting to £58,225.85), which it said would have been Mr A’s first opportunity to repay the mortgage. It also agreed to waive the legal fees added to the account should action be taken to redeem the mortgage before the end of August 2025. Halifax noted that this redemption figure would require an additional £1,337.04 to be paid on top of the amount Mr A had received from the endowment provider. As it understood from Mr A at this stage that the endowment provider would cover the costs incurred until mid-December 2024, it recognised that this may take some time for Mr A to be able to repay this additional amount, but said that the majority of the balance would be required to stop further action. The letter provided Mr A with instructions in respect of how to make the payment. It is not the role of this Service to punish a business. Where a business has got something wrong, we would ask it to put things right by putting the customer back in the position they

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would have been in had everything gone as it should have done. Mr A says that if Halifax had done what it should have done then he would have paid the endowment funds towards the mortgage in December 2024, which would have resulted in no further charges being added. As Halifax agreed to honour the redemption figure from this date and waive any legal fees over that period if the funds were paid by the end of August 2025, this would have put him back in the same position he would have been in had he received the redemption statement in the middle of December 2024. So, I am satisfied that Halifax’s offer was fair and reasonable in the circumstances. Given that Halifax agreed to remove the interest on the mortgage between December 2024 and August 2025, and that Mr A was also earning interest on the endowment funds from receiving the funds until August 2025, he was arguably in a better position financially than he would have been in if he had received the endowment funds and used them to pay off the mortgage immediately. Mr A has questioned what Halifax said in its final response in respect of what amount he would need to pay to stop legal action and said that this was unclear. I have considered this and do not think that the content of the letter was ambiguous in this respect. As the term had already expired in September 2023, in order to close the account, the entire balance was due and had been due for almost two years. Whilst there was a delay in Mr A receiving the endowment funds which was outside his control, he had indicated that he was intending to use these to repay the mortgage and had confirmed to Halifax that he had received the funds (which amounted to over £57,000). So even if Mr A was unable to repay the full amount to redeem the mortgage due to awaiting further funds from the endowment provider, I think it was reasonable for Halifax to have expected Mr A to pay the bulk of the outstanding balance by the end of August 2025, which was around a year after he had received these funds. Mr A has said in response to the view that the endowment provider will now be unlikely to accept the arrangement to cover the costs up until December 2024 and this was part of the proposed solution. As set out above, if Mr A wishes to complain to either the endowment provider about this, or about Halifax’s actions causing the endowment provider not to honour its offer, then this does would be a new complaint. In this regard, I note that Mr A has referred to the endowment provider’s offer to pay the additional interest expiring after six months. However, it seems to me that Mr A is referring to the six-month time limit within which he could refer the matter to this Service if he was not happy with the endowment provider’s response. The endowment provider asked Mr A to provide evidence of any additional interest so that it could review whether any further compensation was due. However, I haven’t seen any evidence that Mr A went back to the provider with these figures once they were provided by Halifax or anything from the endowment provider stating that it would no longer pay any additional amount due to the delay. In any event, this does not affect my view on whether Halifax’s offer was fair and reasonable. Mr A informed Halifax that the endowment provider would cover any costs he incurred due to the delay in releasing the endowment funds until December 2024 and, on this basis, Halifax agreed to cover any interest and costs from this date, provided that Mr A sent the funds to redeem the mortgage account by the end of August 2025. Given that the earliest that Mr A asked for a redemption statement was November 2024 (and on Mr A’s account this was December 2024), Halifax would not be responsible for any delay occurring between Mr A receiving the funds and requesting the redemption statement. Likewise, I don’t think the fact that Mr A was waiting for a breakdown of the monthly interest figure to give the endowment provider meant that he was prevented from paying the endowment funds towards the mortgage balance. Whilst I understand that Mr A now says that he no longer has the full amount of endowment funds available, as things stand, I understand that none of the funds have been paid towards the balance. Given that the term of the mortgage now expired over two and a half years ago,

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I would encourage Mr A to pay as much of the balance as he can from what remains of the funds. I would also expect Halifax to work with Mr A in respect of how any shortfall will be repaid. I know my decision will come as a disappointment to Mr A, but I am satisfied that the offer made by Halifax was fair and reasonable in terms agreeing to honour the redemption figure from December 2024 and the compensation provided for the distress and inconvenience caused. I’m not going to ask it to do anything further, and I don’t uphold this complaint. My final decision For the reasons I’ve explained above, I don’t uphold this complaint and don’t require Bank of Scotland plc trading as Halifax to do anything further. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A to accept or reject my decision before 22 April 2026. Rachel Ellis Ombudsman

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