Barclays Bank UK PLC · DRN-6200825

The complaint Mr and Mrs H complain about their mortgage current account (MCA) with Barclays Bank UK PLC. They’re unhappy with how the MCA was taken out and with how interest has been charged. They’re also unhappy about what Barclays has done following the end of the term, including threatening to repossess their property. What happened Mr and Mrs H took out a mortgage with Barclays in 2009. The mortgage came with a linked MCA – essentially a current account linked to the mortgage which permitted overdraft borrowing up to a facility limit. Any borrowing was secured by the same charge over Mr and Mrs H’s property as the mortgage. And any borrowing on the MCA was due for repayment by the end of the mortgage term – although Mr and Mrs H weren’t required to make fixed payments on the MCA borrowing, they were required to keep it within the facility limit from time to time and to repay the total outstanding by term end. Mr and Mrs H had largely, though not entirely, paid off their mortgage by the end of the term in December 2020. But by then the balance on the MCA was around £94,000 overdrawn, and Mr and Mrs H weren’t able to pay that off. As they’ve not made any payments since then, and because Barclays continues to add interest, the outstanding balance is now around £135,000. Mr and Mrs H have complained about their MCA before. Their two most recent complaints were considered by other ombudsmen. In October 2022, an ombudsman issued a jurisdiction and a final decision, in which she said: • Mr and Mrs H’s complaint that the MCA had been mis-sold was out of time, because they hadn’t referred that complaint to us within six months of Barclays’ final response to it and there were no exceptional circumstances to explain the delay. • In any case, even if this complaint hadn’t been brought out of time we still wouldn’t consider it, because we’d previously said in 2019 that we couldn’t consider the sale. • Barclays had acted fairly, and in line with the contract terms, in charging interest at its standard variable rate (SVR). It made Mr and Mrs H aware of the interest rate before they started to use the MCA overdraft. • Barclays was reasonably entitled to expect Mr and Mrs H to pay the interest as well as the capital they’d borrowed once the term ended, and it hadn’t acted unfairly in declining a reduced settlement figure. • As the term had ended two years earlier, it wasn’t unreasonable that Barclays was now considering enforcement action to recover the outstanding balance. In September 2023, another ombudsman issued a decision in which she said that we wouldn’t consider a further complaint about the sale of the MCA or how Barclays had charged interest, because we had dealt with both those complaints already.

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Mr and Mrs H made this complaint in 2025. They said they’d tried to agree a payment plan with Barclays, but it was continuing to charge more than £800 per month in interest, which was more than they were able to pay. They complained about what Barclays has reported to their credit files. They complained that Barclays wasn’t engaging with them, or with their MP who they’d asked to intervene on their behalf. They also said that the mortgage was mis- sold, including because Barclays made errors about the nature of their income at the time. They said Barclays had threatened legal action to repossess their property and had only stopped the action when Mr and Mrs H made a payment of £7,000, which they felt forced into making and which they now want refunded. They said that the whole situation has had a substantial impact on them, caused emotional distress and affecting their well-being. Our investigator thought that overall Barclays had acted fairly in trying to recover the outstanding balance and considering legal action. But he said that it had, at times, not responded to contact from Mr and Mrs H or their MP and this had caused them further upset. He said Barclays should pay £250 compensation. Barclays accepted that but Mr and Mrs H didn’t. They asked for an ombudsman to review their complaint. I reached the same conclusions as the investigator, but because some of my reasons were different I issued a provisional decision to give the parties a further chance for comment. My provisional decision I said: “At the outset I need to make clear that I won’t be considering anything that was covered by Mr and Mrs H’s previous complaints – in particular regarding the sale of the MCA and whether Barclays is entitled to charge interest on the MCA at the SVR, as well as any issues following the end of the term covered in the previous decisions. That’s because the Financial Ombudsman Service has a statutory obligation to resolve cases, and in the interests of fairness and the efficient use of our resources we won’t generally re-consider issues we’ve looked at before. There’s an exception in our rules so that we can consider complaints again where there’s material new evidence likely to affect the outcome, but I’m not persuaded that’s the case here. In this decision, therefore, I’ll focus on what’s happened since the last complaint, as well as on issues that weren’t covered by it or by previous complaints. That means I’ll look at: • The action Barclays has taken to try and recover the outstanding balance, including court action, but only since the last complaint. • Whether Barclays has engaged with them and treated them fairly, but only since the last complaint. • The £7,000 payment Mr and Mrs H say they made to stop legal action. • What Barclays has reported to their credit files. • If I find Barclays has done anything wrong in relation to the above, what it should fairly do to put things right. Having considered everything carefully, I’m not persuaded Barclays has acted unfairly here. The term of their mortgage expired in late 2020, at which point the mortgage balance and the full outstanding balance on the MCA were due to be repaid. I understand that Mr and Mrs H have concerns about the circumstances in which the MCA was taken out, and believe it was mis-sold to them. But we’ve already explained that we can’t consider that complaint and I’m not going to revisit that

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decision here. The fact is that by the end of the term the balance on the MCA was around £95,000, and Mr and Mrs H were obliged to repay it at that point. But they didn’t do so. That balance included the amount they’d borrowed as well as interest charged – as we’ve said in previous decisions, it was fair and reasonable for Barclays to charge interest on the borrowing at the SVR. As a starting point, it’s reasonable for a lender to expect a borrower to repay their mortgage at the end of the term. But where that’s not possible, I’d expect a lender to show reasonable forbearance and try and reach an agreement for the outstanding balance to be paid off within a reasonable time. But I wouldn’t expect a lender to defer repayment indefinitely. The previous ombudsman said that it was reasonable for Barclays to expect Mr and Mrs H to repay the MCA at the end of the term, and that the action it had taken since then was reasonable. I’m only considering what has happened since that complaint. I can see that in the years since that complaint Mr and Mrs H haven’t made any payments to their MCA. The last payment they made was in December 2020. Because they’ve not made any payments, and because interest continues to be charged, the balance has grown in the years since. By the end of 2025, it was around £135,000. Mr and Mrs H have said that Barclays should have suspended charging interest while their complaint was being investigated and the account was in dispute. I’m afraid I don’t agree it would be fair to expect Barclays to do that. It’s fair and reasonable for it to charge interest on outstanding borrowing while it remains outstanding. I’ve looked at the interactions between Mr and Mrs H since their last complaint. They’ve been focused on their complaint about the MCA and in particular how it was taken out. But they’ve also said at various times that they could make some payments, or pay lump sums – but haven’t done so. I appreciate the interest being charged was by then more than they say they could afford to pay each month. But any payment towards the balance would have been accepted and would have reduced future interest. Having reviewed the income and expenditure, Barclays thought Mr and Mrs H could have afforded to pay more than they said, because they were prioritising other commitments over their mortgage. Whether or not that was correct, there was nothing to stop Mr and Mrs H making at least some payments. I think Barclays has shown reasonable forbearance. It’s tried to work with Mr and Mrs H and find a way for the MCA balance to be repaid. But that’s not proved possible. While Mr and Mrs H have discussed making payment at times (though not then made any payment), at other times they’ve been focussed on their complaints and unwilling to engage about repayment until the complaints are resolved to their satisfaction. Barclays has explained that their complaints about the circumstances in which the MCA was taken out and the charging of interest have already been dealt with (even if not in a way Mr and Mrs H accept) and won’t be revisited. The focus needs to be on repaying what’s owed. I think that was fair. Mr and Mrs H have said they want to arrange a face to face meeting with a senior Barclays executive to discuss their mortgage and negotiate a way forward. Barclays has said that’s not possible. I don’t think that was unreasonable. Barclays has many mortgages, and they’re managed by its specialist mortgage department. It’s not

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possible or practical for senior members of staff to have oversight over individual accounts. I won’t be requiring Barclays to arrange a meeting for Mr and Mrs H. In all the circumstances, it was reasonable that Barclays instructed its solicitors to take legal action. There didn’t appear to be any other way of recovering the outstanding amount. No payments had been made for several years and the balance was growing month by month – making the situation worse for Mr and Mrs H. I appreciate this was difficult and upsetting for Mr and Mrs H. But I’m satisfied it was reasonable for Barclays to conclude that the last resort of taking court action to repossess the property had been reached. In the end, no possession order was made. Following discussion with Barclays’ solicitors, it was agreed that the legal proceedings would be adjourned to give Mr and Mrs H more time. The solicitors wrote to the court to request that the hearing scheduled for 9 January 2025 be adjourned. But that letter didn’t reach the court in time – as neither Mr and Mrs H nor Barclays (or its solicitors) attended the court hearing in the expectation it would simply be adjourned, the court struck the possession proceedings out. I don’t think this is evidence that the court found that Barclays had acted wrongly in bringing the proceedings in the first place. Mr and Mrs H say they were forced to pay £7,000 to avoid the legal proceedings continuing. Barclays says it didn’t receive any such payment. I’ve looked at the account history and there’s no record of that payment having been received. Our investigator asked Mr and Mrs H for evidence of having made the payment, but they didn’t reply. I’ve therefore not seen any evidence that they did in fact make that payment. And even if they did, I wouldn’t require Barclays to refund it – the outstanding balance is around £135,000, and Barclays would be entitled to use any payments Mr and Mrs H did make to reduce the debt. I’ve also reviewed what Barclays has reported to Mr and Mrs H’s credit files. It’s not reported any adverse data in respect of the mortgage. But in respect of the MCA, it has reported adverse data. The MCA is an overdraft facility on a current account (albeit one secured by a mortgage deed), not a loan, and should be reported as such. There’s no contractual obligation on Mr and Mrs H to make monthly payments, as there would be with a loan. But there is a contractual obligation to keep the overdraft balance within the credit limit. Because they’ve not made any payments to the MCA since 2020, and the balance has increased since then because of interest charges, the MCA balance has been over the credit limit continually since early 2021. Over that period Barclays has reported “1”, “2”, “3”, “4”, “5”, and then “6”. This is correct. Where an overdraft has been over the credit limit for one month, a lender should report “1”. Where it’s been over the credit limit continually for two months, it should report “2”. And so on. Once it has been over the limit for six months, the lender should report “6” – and then report “6” in subsequent months too. “6” is the highest number to be reported; it means that the overdraft has been over the credit limit continually for six months or more. Barclays reported “1” to “6” in the first half of 2021, and it has been reporting “6” ever since July 2021. I’m satisfied this is correct, and what Barclays has been reporting fairly reflects the conduct of the MCA over this period. It shows that Mr and Mrs H have been over the agreed credit limit for six months or more ever since mid-2021. I don’t therefore intend to require Barclays to make any changes to Mr and Mrs H’s credit files.

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Having looked carefully at everything that has happened, I think that overall Barclays has acted fairly. It’s now more than five years since the MCA was due for repayment, and more than five years since Mr and Mrs H have made any payments to it. Over that time Barclays has sought to work with Mr and Mrs H to find a way to repay, including withdrawing the legal action in early 2025 to give them a further chance. I think that was fair. Once this complaint is over it’s likely Barclays will resume trying to collect the outstanding balance. It will need to treat Mr and Mrs H fairly, including taking account of their personal circumstances and vulnerability, in deciding what to do next – but ultimately it is entitled to expect the MCA balance to be repaid. I’d urge Mr and Mrs H to put the past behind them and focus on repaying what they owe now, rather than on what happened when the MCA was taken out. If they’re not able to find a way to repay, there’s a very real risk Barclays will end up going back to court to repossess their property. I hope it doesn’t come to that. Finally, following the involvement of our investigator, Barclays has now agreed to offer £250 compensation to reflect the fact that it didn’t always respond to Mr and Mrs H as quickly as it should have done. I think that’s fair, and I don’t require it to do anything further to resolve this complaint.” Barclays didn’t make any further comments. Mr and Mrs H didn’t agree with my provisional decision. They said: • The £7,000 was paid to their solicitor for advice and representation, because Barclays had threatened them with legal action. • Barclays had advised Mr H to use the MCA to invest in his business. But when he later tried to take out a loan to pay it back, he was told that he wasn’t eligible and that he should never have been advised to use the MCA for business purposes. Mr H said he had complained about this at the time and had been passed backwards and forwards. He said he had made an appointment to discuss this at Barclays’ head office, but when he arrived the appointment had been cancelled and the person he was due to see wasn’t there. • Mr H said that many parties – other banks, lawyers, his MP, and others – had advised that Barclays was in the wrong and the MCA borrowing had been mis-sold. He said that we should require Barclays to agree a reduced settlement figure he can pay off over time. He said that we should require Barclays to meet with him to agree a settlement figure. And it should compensate him and Mrs H for all the stress of the action it had taken, including threatening to repossess their property. 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’ve also considered everything Mr H said in response to my provisional decision. But for the reasons I’ve already explained I can’t consider anything to do with the circumstances in which the MCA borrowing was taken out as part of this complaint. We’ve previously explained why we can’t consider that complaint and I’m afraid that’s not something I can revisit here – however strongly Mr H feels about it. For the reasons I’ve already explained, I’m satisfied that during the period I can consider Barclays has acted fairly. It’s now some years since the MCA balance was due for

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repayment in full. Mr and Mrs H haven’t made payments, despite agreeing they would, and the balance continues to grow. Given I can’t look at how the borrowing came about, there’s no basis on which I can fairly find that Mr and Mrs H don’t owe the full amount of the MCA borrowing, and therefore it wouldn’t be fair to require Barclays to write off part of the outstanding debt or accept a reduced settlement. I’m also not going to require Barclays to arrange for a senior member of staff to meet Mr H to negotiate a reduced settlement. I’m afraid that’s not how mortgage borrowing works. Mr and Mr H borrowed what they did. Barclays was entitled to charge interest on the borrowing, and is now entitled to expect them to repay it. It’s fair and reasonable for Barclays to expect them to continue to deal with its mortgage centre until the balance is repaid. I also don’t think it was unfair that Barclays took further action, including legal action, when the balance wasn’t repaid and Mr and Mrs H didn’t make the payments they said they would. Repossession action should always be a last resort. But the MCA balance continues to grow, and with no prospect of it being repaid it wasn’t unreasonable for Barclays to conclude that other options had been exhausted. For that reason I won’t be requiring Barclays to refund the costs Mr and Mrs H paid to their solicitor. And while the prospect of losing their home was no doubt very upsetting and stressful for Mr and Mrs H, I don’t think that was because of anything Barclays did wrong or for which I can fairly require it compensate them. As I said in my provisional decision, I’d urge Mr and Mrs H to put the past behind them and focus on repaying what they owe now, rather than on what happened when the MCA was taken out. If they’re not able to find a way to repay, there’s a very real risk Barclays will end up going back to court to repossess their property. I hope it doesn’t come to that. My final decision My final decision is that Barclays Bank UK PLC’s offer to resolve this complaint by paying Mr and Mrs H £250 compensation is fair and reasonable in all the circumstances. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs H and Mr H to accept or reject my decision before 7 April 2026. Simon Pugh Ombudsman

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