UK banks win court battle in historic loan complaint case – report

A High Court justice successful London has ruled against the Financial Ombudsman Service successful a quality implicit whether consumers tin prosecute complaints astir older overdraft and recognition paper cases extracurricular the accustomed clip limits, reported the Financial Times.

The lawsuit was brought by Barclays, NatWest, Santander and subprime lender Vanquis.

They challenged the ombudsman's presumption that immoderate historical lending complaints could inactive beryllium considered adjacent aft the modular deadline had passed.

The tribunal recovered that the FOS had made a "fundamental mistake of law" successful taking connected specified complaints beyond the established six-year period.

Under rules acceptable by the Financial Conduct Authority, a user usually has six years to kick astir a circumstantial event.

If that play has passed, a ailment whitethorn inactive beryllium made wrong 3 years of the constituent astatine which the user archetypal became alert of the issue.

The FOS had argued that ineligible decisions, including a Supreme Court ruling successful 2023, meant lenders carried an ongoing "corrective responsibility".

On that basis, the ombudsman said a bank's nonaccomplishment to enactment close an earlier occupation for example, by declining to repay past involvement charges could number arsenic a caller "omission" that could itself beryllium challenged.

That speechmaking would successful signifier person extended the play during which aged lending cases could beryllium examined.

Justice Dexter Dias rejected that approach. In the judgment, helium said the FOS mentation "seriously and unjustifiably" weakened the intent of having a clip bounds and the request for "swift and informal quality resolution".

The FOS said: "We are disappointed with today's judgment. We are cautiously considering what it means for the cases affected, arsenic good arsenic the wider implications."

The determination is expected to trim the scope for consumers to bring complaints to the FOS implicit "unfair lending" nether the Consumer Credit Act 1974.

During the case, banks argued that the FOS attack could person wide effects connected older loans.

Santander gave grounds that ailment volumes against the slope had accrued nether the wider mentation of the clip limit.

NatWest said it welcomed the ruling and added that it had "a agelong past of moving productively" with the FOS.

Barclays noted it was pleased with the decision.

"UK banks triumph tribunal conflict successful historical indebtedness ailment lawsuit – report" was primitively created and published by Retail Banker International, a GlobalData owned brand.