HSBC UK Bank Plc · DRN-6069154

The complaint A limited company, which I’ll refer to as M, complains that HSBC UK Bank Plc has been wrongly pursuing it for arrears on its bounce back loan (“BBL”) that M doesn’t owe. What happened In 2020, M successfully applied for a £27,500 BBL. In late 2021, when repayments were due to start, there were administrative problems involving a direct debit and a term extension request. These problems have been the subject of a previous complaint, which was referred to the Financial Ombudsman Service. M made manual payments into its BBL for the next year, paying in an amount based on a ten year term. HSBC said that the term extension had never been put in place, so there were therefore arrears building up. In late 2022, an agreement was reached with the bank. M took a six month repayment holiday and term extension, then cleared the sum HSBC had said was outstanding. In May 2023, repayments resumed at the correct level. But the bank started writing to M saying that the BBL was still in arrears by £488. M’s director wrote several letters to HSBC disputing this sum. He also made several branch visits to try and sort things out. In August 2025, HSBC issued a default notice, requiring M to clear the £488 outstanding within 21 days. M paid in £488 but continued to maintain that it did not owe this sum. One of our investigators looked into what had happened, but didn’t recommend HSBC take any action. M disagreed and asked for an ombudsman’s decision. M’s director still didn’t understand where the £488 of arrears came from and thought M should receive compensation for HSBC’s poor customer service. 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. First, as the issues regarding the initial direct debit and term extension application have already been considered by our service in a previous complaint, I cannot comment on them here, nor can I include them in assessing customer service. I can only look into the matter of the £488 alleged arrears. Having done so, I’m satisfied that the bank were correct in saying that amount was outstanding. I also agree with our investigator’s conclusions regarding compensation. So I’m not going to require HSBC to take any action. I’ll explain why below.

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I’ve examined M’s BBL statements and HSBC’s communications about the BBL. On 17 September 2022, the bank wrote to M, saying that a sum of £2,238 was outstanding on the loan. I agree with the bank on this sum. On 11 October 2022, M signed a variation agreement, which extended the term of the loan and gave M a six month repayment holiday. The agreement set out that the next monthly repayment would be due on 6 May 2023 – so the six months ran from November 2022 to April 2023. M cleared the £2,238 in March 2023, as agreed with the bank, and then made its next payment on time in May 2023, which was for the newly reduced amount of £269 (because of the term extension). Unfortunately, between the bank’s letter on 17 September and the PAYG beginning in November, another repayment fell due – on 6 October 2022. The BBL statements show that M didn’t pay anything that month. So M therefore owed an additional £488, being October’s instalment. This was for the original higher monthly repayment amount, because the variation agreement was not yet in place. I’m therefore satisfied that the bank was correct in informing M that £488 was still outstanding and I hope this explains things clearly to M’s director. I can see that the bank sent a large number of letters about the outstanding sum and there were also a number of phone calls, during which M’s director disputed the amount owed and no agreement was reached. I am sure this was frustrating for M’s director, as was being told to go to a branch, which then couldn’t help him. I don’t doubt that the bank could have explained things better. However, I’m afraid I agree with our investigator that there’s no evidence this inconvenienced M. As I’ve explained above, M did actually owe this amount and M’s director has told us that M wasn’t actively trading, so this didn’t take time away from M’s other activity. M is the eligible complainant here and I can therefore only award compensation for inconvenience to M, not for vexation caused to M’s director personally. I appreciate that this answer is likely to cause M’s director further frustration, but I’m therefore not going to direct HSBC to take any further action. My final decision For the reasons set out above, I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask M to accept or reject my decision before 24 March 2026. Louise Bardell Ombudsman

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