Barclays Bank UK PLC · DRN-5862432

The complaint A limited company, which I’ll refer to as ‘S’, complains that Barclays Bank UK PLC agreed to a repayment holiday on its Bounce Back Loan (“BBL”) but then defaulted the loan and closed the business accounts. S’s complaint is brought to this service by its directors, whom I’ll refer to as ‘Mr and Mrs X’. What happened S took out a Bounce Back Loan with Barclays in 2020. By early 2024, the business had fallen behind with its repayments, and the loan had built up arrears. Around this time, Mr and Mrs X experienced difficult personal circumstances, including Mr X’s significant health issues and a fire at their home. Mr X contacted Barclays on several occasions between January and March 2024, and during those calls he discussed both the financial difficulty the business was experiencing and the challenges he and his family were facing. Barclays recorded several vulnerability markers on the account because of these conversations. On 13 February 2024, with the BBL having been in a position of multiple arrears for some time, Barclays issued a formal demand to S which gave the business until 12 March 2024 to address the loan arrears. On 21 February, Mr X spoke with Barclays and asked for help in managing the repayments. During that call, Barclays agreed to set up a six-month Capital Repayment Holiday, which reduced the monthly payments going forward to cover interest only. But Barclays also explained during that call that the existing arrears still needed to be dealt with separately, and that an income and expenditure review was required so they could work out an affordable arrangement. Mr X said he couldn’t go through the assessment at that moment because he was at work, but that he would call back the following day to complete it. Barclays say they didn’t hear from S again before the deadline given in the formal demand, and that several attempts to call S back weren’t successful. Mr and Mrs X say they did try to contact Barclays but struggled to get through to the right department and weren’t called back when they expected to be. In any event, the income and expenditure assessment wasn’t completed, and no repayment plan for the arrears was agreed. When the deadline in the formal demand passed on 12 March 2024 without the arrears being addressed, Barclays defaulted S’s BBL, transferred the loan to their recoveries team, and closed S’s business accounts. After learning of this, Mr and Mrs X raised a complaint with Barclays on S’s behalf. They said they believed the repayment holiday meant the situation was under control, and that they’d made genuine attempts to provide the information Barclays needed but hadn’t been able to get through. They also said Barclays’ communication had been inconsistent and that the bank hadn’t properly accounted for the difficult circumstances they were in. Barclays didn’t uphold the complaint. They accepted there had been some administrative issues, including problems locating certain letters and a mistake in how the complaint was logged, but said those didn’t affect the need for S to arrange a plan for the arrears. Barclays

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also confirmed that the repayment holiday only changed the amount due for future instalments and didn’t clear the arrears, and that because no arrangement was agreed, they were entitled to act on the formal demand. Mr and Mrs X weren’t satisfied with Barclays response, so they referred S’s complaint to this service. One of our investigators looked at this complaint. But they didn’t feel that Barclays had acted unfairly in how they’d administered S’s accounts and felt that Barclays had made it clear to Mr and Mrs X that the BBL arrears needed addressing. Mr and Mrs X remained dissatisfied, so the matter was escalated to an ombudsman for a final decision. 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 want to start by saying that I don’t doubt the past few years have been extremely difficult for Mr and Mrs X, both personally and in trying to keep S operating. I’ve thought carefully about the health challenges Mr X has faced, the fire at Mr and Mrs X’s home, and the wider pressures this will inevitably have placed on them and their business. I appreciate that dealing with a loan in arrears, and then having the business account closed, will have added to an already stressful situation. A key part of S’s complaint is the belief that agreeing the Capital Repayment Holiday in February 2024 meant the situation regarding the existing arrears on the BBL was under control and that Mr and Mrs X didn’t need to take further action. I’ve reviewed the call from 21 February 2024, and having done so I’m satisfied Barclays were clear that while the repayment holiday reduced future instalments for a temporary period, it didn’t clear or pause the arrears that had already built up. I’m also satisfied that Barclays explained during that call that the arrears still needed to be addressed separately through an income and expenditure assessment, so they could agree a repayment plan. Importantly, Mr X said clearly on that call that he understood this and that he would call back the following day to go through the assessment. I feel this is a clear indicator that Mr X knew there was still something he needed to do to prevent the formal demand from progressing, and I don’t feel that Barclays contributed to any misunderstanding in any significant way. Mr and Mrs X say they did try to call Barclays back but struggled to reach the right department, and that they weren’t called back when they expected. I don’t dismiss what they’ve said. But I haven’t seen any evidence, such as call logs, to show that attempts were made. Additionally, Barclays’ internal records don’t show any further contact from S before the deadline in the formal demand expired. However, I feel that whether Mr and Mrs X did try to contact Barclays or not is largely moot here. This is because if I accept that Mr and Mrs X did try to make contact, I don’t feel that changes the overall position. The formal demand gave a clear deadline of 12 March 2024, and the consequences of not resolving the arrears by that date were explained. In those circumstances, I think it was reasonable to expect Mr and Mrs X to keep trying until they succeeded in contacting Barclays, regardless of any difficulty or inconvenience they might have experienced in doing do. Ultimately, I feel that the onus was Mr and Mrs X to provide Barclays with the information Barclays needed. The affordability assessment couldn’t be completed without S’s input, and Barclays couldn’t consider any form of forbearance for S without confirmation of whether it was reasonably affordable. So, on balance, I don’t think Barclays acted unfairly by treating the formal demand as unmet when the deadline passed.

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S also says Barclays didn’t take proper account of the difficult circumstances Mr and Mrs X were experiencing. I’ve thought carefully about this. Barclays recorded multiple vulnerability markers, asked about Mr X’s health, tried to understand his circumstances, and explained why the arrears needed a plan. They also agreed the repayment holiday to make future instalments more manageable and attempted several call-backs. Vulnerability is an important consideration, and firms are expected to respond appropriately. But it doesn’t mean a firm must remove or delay essential steps in arrears management, particularly where those steps require the customer’s participation. In this case, I think Barclays took reasonable steps to help Mr and Mrs X meet S’s contractual payment obligations and acted sensitively. But the key issue was that the arrears weren’t addressed, and that was something Barclays couldn’t resolve without S engaging fully in the process. Mr and Mrs X have also raised concerns about inconsistency in Barclays’ communication, including difficulties locating certain letters and an error in how their complaint was logged. Barclays have acknowledged some administrative issues. But I don’t feel that these secondary issues affected the explanation that Barclays gave about the arrears, the need for an affordability assessment, or the consequences of the formal demand. Nor did they prevent S from completing the steps needed to agree a repayment plan. So, while it’s unfortunate these mistakes occurred, they don’t change my position on this complaint. Because the arrears weren’t resolved by the deadline in the formal demand, Barclays defaulted the loan and transferred the account to their recoveries team. The terms of the Bounce Back Loan and Barclays’ business-banking procedures meant that as a consequence of this, S’s business accounts were then closed. Given the arrears and the expiry of the formal demand, I’m satisfied Barclays were entitled to take these steps and didn’t act unfairly in doing so. All of which means that I won’t be upholding this complaint or instructing Barclays to take any further or alternative action. I appreciate this isn’t the outcome S were hoping for, and I don’t underestimate the impact these events have had on the business. But for the reasons I’ve explained, I don’t think Barclays acted unfairly in how they managed the loan arrears, the repayment holiday, or the closure of S’s accounts. I hope that Mr and Mrs X will understand, given what I’ve explained, why I’ve made the final decision that I have. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask S to accept or reject my decision before 14 April 2026. Paul Cooper Ombudsman

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