Lloyds Bank PLC · DRN-6111051

The complaint Miss F complains that Lloyds Bank PLC (trading as MBNA) did not implement a repayment plan to which it had agreed. What happened Miss F says that MBNA agreed a consolidation loan with her on 17 June 2025. She says the loan was to be implemented after a six-month repayment plan, but MBNA required her to repeat an income and expenditure analysis despite earlier assurances to the contrary. She says that she then received a letter from MBNA dated 2 September 2025 to tell her the account had been closed, just three days after another letter asked her to contact MBNA’s Financial Assistance department. Miss F adds that MBNA misrepresented their call as “rushed” when it lasted over an hour. MBNA says that, when Miss F called on 17 June 2025, it offered her a six-month proving period as part of a Combine Your Debts plan. It says that, when it became apparent that Miss F wanted to start this period at a date that was too far in the future, it agreed to put her account on a 30-day hold. MBNA says that, when she called back at the end of the hold, Miss F became frustrated that she needed to repeat the same details. It says that this had been explained to her during the call on 17 June 2025 and clarified that the plan had not been fully agreed because no start date had been set. MBNA says that a default notice was issued on 19 July 2025 as no support plan was in place and that this outlined the process going forwards if no arrangement was made. It says it encouraged Miss F to contact its Financial Assistance team as soon as possible. However, it paid Miss F £40 as it acknowledged the call on 17 June 2025 could have been handled better, knowing she had limited time. Our investigator did not recommend that the complaint should be upheld. She found that Miss F did not go through the necessary process to set up a repayment plan and MBNA had done nothing wrong by continuing to close her account. She considered the £40 paid by MBNA for poor service on the call was reasonable. Miss F responded to say, in summary: • The investigator’s view did not correctly apply the Financial Ombudsman’s duties of fairness and good practice – the latter being illustrated by another bank’s response in a similar situation; • The repayment plan was agreed on the call on 17 June 2025, and she continued to pay the requisite £500 per month; • The default notice was issued prematurely;

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• Her account was closed despite not missing any payments from July 2025 and even though there was an ongoing complaint; • She mitigated her losses by complaining immediately and promptly escalating to the Financial Ombudsman Service; • The Debt Management Company has accepted the £500 per month repayment plan which shows it was viable and enforceable; • She has not cashed the £40 cheque sent by MBNA. 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. Miss F took out a £25,000 loan on 30 March 2023. Her scheduled repayments were £441.53 per month for seven years. Unfortunately, Miss F was made redundant in October 2023, and MBNA put a hold on her account and suspended interest for six months. In December 2023, Miss F paid her arrears with redundancy money and resumed her contractual repayments in January 2024. In August 2024, Miss F resigned from her new job due to the long hours and the effect on her well-being and MBNA agreed a three-month payment holiday with no further interest to be applied while she was looking for a new role. Another 30-day hold was agreed in November 2024, but when Miss F said she had a new job in December 2024, MBNA set up a three-month repayment plan for her to pay £200 on top of her contractual payments. At that point Miss F’s arrears were £1,651.36, but interest charges remained suspended. Although Miss F made her contractual payments in January, February and March 2025, her account remained in arrears, and she notified MBNA that she was unemployed again in March 2025. As an exception, MBNA said it would offer Miss F one final three-month plan due to the interviews she said she had lined up, but it told her that closure of the account may be the only outcome if she couldn’t resume payments after that. The plan was due to end on 18 June 2025, and Miss F initially called MBNA on 11 June 2025 to say she was still struggling to find work but would get accurate budget figures before the end of the plan. I have listened to the relevant call with Financial Assistance on 17 June 2025 and Miss F begins by explaining that she only had a quick break from work in which to have the conversation. I acknowledge that MBNA has said that it may have been better for the agent to reschedule the call and, as such, paid Miss F £40 for this element of its service. I consider that to be a reasonable level of compensation for this aspect. As Miss F’s account was by then almost £3,000 in arrears, the MBNA agent went through a budget in order to see what could be offered to her. MBNA’s system proposed either a consolidation loan or closure of the account, and Miss F opted for the former. I’m satisfied that Miss F understood the plan would entail an initial six-month “proving” period with repayments at £500 per month. The agent said that interest would be suspended for this

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period and, if completed successfully, the remaining debt would be consolidated into a new loan with repayments of £500.57 for 37 months. However, the latest start date that the system offered for this plan was 22 July 2025 and Miss F requested that the first payment should be taken after she was paid on 26 July 2025. As a result, after discussing it with a manager, the agent agreed a further 30-day hold on the account and explained that Miss F would need to call back before the end of this period. Miss F said she’d diarise a call for 16 July 2025. The agent then went through further clarification of the 30-day account hold – he explained that it was agreed as an exception due to not being able to select the required start date, and that interest would remain suspended. Towards the end of the call Miss F was very clear that she didn’t want to go through the whole process again during her next call, and the agent explained that MBNA would need to complete the mandatory script to establish whether there had been any changes. He also explained that if there were no changes, then Miss F would be given the same options, but that he would note the discussion. Based on everything I heard on the call, I consider that MBNA acted fairly by agreeing to a further hold on the account and I can see the agent recorded the discussion on the system. I’m also satisfied that the consolidation loan had not been finalised on the call. I can see Miss F was sent a letter about the hold on her account which said, “Please get in touch before the end of this hold if you need further support from us or are still having difficulty making your payments.” However, by the time the 30-day hold expired on 18 July 2025, Miss F had made no further contact and, as no payments had been received since March 2025, I don’t find it unreasonable that MBNA sent Miss F a default notice on 19 July 2025. It said: “Please make a payment or get in touch about your loan by 6 August 2025. If we haven’t yet agreed a way forward with you, it’s important we work together to put a repayment plan in place, or for you to make a payment for £3,376.07 by 6 August 2025. If this doesn’t happen, we may end your agreement. If we’ve already agreed a way forward with you there’s nothing more you need to do. There’s still time for us to help – but you must get in touch straight away.” On 22 July 2025, Miss F did call again, with the intention of setting up the repayment plan she’d agreed on the previous call. However, when she was asked for information that she’d already provided, she said she didn’t want to reconfirm the details and raised the complaint. She requested another 30-day hold, but MBNA was unable to agree to any further holds on the account.

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Following receipt of the default notice, Miss F called again as she was unhappy that it had set a deadline to put a repayment plan in place. MBNA said she also confirmed that she would not be speaking to the Customer Financial Assistance (CFA) team again until her complaint had been resolved. The complaint manager called Miss F on 4 August 2025 and explained that MBNA had up to eight weeks to investigate a complaint and suggested that Miss F should speak to the CFA team as soon as possible, to prevent the loan being closed due to the lack of a repayment plan. I note that Miss F made payments totalling £500 on 5 and 6 August 2025 but still did not call the CFA team to formalise a repayment plan. That said, MBNA sent its response to Miss F’s complaint on 7 August 2025 and again encouraged her to contact the CFA team: “To prevent your accounts from closing and to explore the support available, we strongly encourage you to contact our Financial Assistance team as soon as possible.” A further warning was sent on 12 August 2025 which said: “Please get in touch in the next 14 days about the missed payments on your loan. It’s not too late to stop your agreement from ending. Talk to us about a repayment plan We’ll work with you to agree a payment plan you can afford. If we don’t hear from you If you don’t get in touch in the next 14 days, we’ll end your loan agreement with us.” The CFA team received no further contact from Miss F and MBNA closed the account on 30 August 2025. The account’s term and conditions say: “When can we end this agreement? We may end this agreement and demand full repayment of the loan if you: • do not pay us or don't pay your monthly loan repayments on time;” Based on all the evidence I’ve seen and heard, I don’t find MBNA made an error when it closed Miss F’s account on 30 August 2025. I say that because: • Miss F’s account has been in arrears since September 2024; • No interest was applied to her account after 1 August 2024; • No payments were made to the account between 5 March 2025 and 5 August 2025; • MBNA agreed to at least five repayment plans or account holds;

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• MBNA was entitled to ask Miss F to confirm her latest financial situation when she called back to initiate the consolidation loan; • The consequences of not setting up a new plan were clearly explained to Miss F several times; • I’m satisfied that MBNA acted within the terms and conditions of Miss F’s account and in line with the Financial Conduct Authority’s guidelines. I note that Miss F has also complained about her account being transferred to a debt management company. Although that is outside the scope of this complaint, as MBNA has not yet had a chance to respond, I can see that the terms and conditions say: “We may transfer our rights and duties under this agreement to any person or business without asking you.” In summary, I consider MBNA has responded fairly to Miss F’s financial difficulties many times since she took out her loan. I acknowledge that she said another bank’s processes enabled her to more easily set up a repayment plan in similar circumstances, but I have to consider each complaint on its individual merits. For the above reasons, I cannot agree that the default notice was issued prematurely, nor do I agree that she mitigated her losses given the opportunities she had to call the CFA team. Finally, I note that Miss F says she did not cash the £40 cheque issued by MBNA. If the cheque has now expired, she can now contact MBNA to ask for it to be reissued. My final decision My decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss F to accept or reject my decision before 28 April 2026. Amanda Williams Ombudsman

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