National Westminster Bank Public Limited Company · DRN-5705256

The complaint A limited company, which I’ll refer to as N, complains that National Westminster Bank Public Limited Company unfairly closed its current account and put its bounce back loan (“BBL”) into default. N is represented by one of its directors, Mr W. What happened The bank told us: • N had a £3,000 committed overdraft facility, which expired in September 2024. They decided not to renew the overdraft for a year and transferred N to their Specialised Business Management area, informing Mr W by email. • After Mr W had a conversation with Specialised Business Management, they agreed to renew the overdraft temporarily for three months. • When the temporary overdraft expired on 1 February 2025, they made several attempts to contact Mr W to discuss repayment. • In March 2025, in the absence of any contact from Mr W, they issued formal demands for repayment in full of the overdraft and a BBL. They then transferred both to their Recoveries department. Mr W told us: • In March 2025, he returned from holiday to find the formal demand letters. He phoned the bank the next day to learn that N’s account had been closed. • The formal demand letters were the only notification he received (other than a text message referring to the BBL) and he only got them when it was too late. • He had never been told that the overdraft was linked to the BBL. One of our investigators looked into the complaint, but didn’t recommend upholding it. N disagreed and asked for an ombudsman’s decision. He said he had acted immediately when he was aware of the problem. And the bank had shut down his entire banking due to the overdraft yet none of their communications had referred to that overdraft clearly. 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. Having done so, I’m sorry to disappoint Mr W, but I have reached the same conclusion as our investigator, for essentially the same reasons. I’ll explain why below.

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My starting point here is that I think Mr W should have been aware that N only had a temporary overdraft until 1 February 2025. I say this because the bank’s records show this renewal only occurred after a detailed phone conversation, in which income and expenditure was considered and the bank explained their concerns regarding the account being in persistent overdraft over the preceding period. I’m satisfied that the bank explained that, when this temporary overdraft expired, there would be no automatic renewal and further discussion would be required, if the account remained overdrawn. I consider that N was therefore on notice that action would be required by 1 February 2025 and that the bank had made no commitment to provide an overdraft facility beyond that date. N remained overdrawn at that point. In my view, Mr W therefore had an obligation to get in touch with the bank by that date. Choosing not to get in touch ran the risk that the bank might take further action. Mr W says that he didn’t realise that N’s overdraft was linked to the BBL. This was set out in the BBL agreement, where it said that defaulting under any liability to the bank constituted an event of default for the BBL. This is known as a “cross-default clause”. It is normal bank practice to include such clauses in all lending documentation and I don’t think it is unfair for NatWest to rely on it in the circumstances here, even when repayments on the BBL itself were up-to-date. After the temporary overdraft expired, the bank tried to call N on 3 February and then sent a text message, which read “we would like to talk to you regarding your account”. For some reason, this quoted the BBL account number rather than the current account, which I agree was an error, but I don’t think it was sufficient to obviate N’s responsibility to follow up on its expired overdraft. In my view, at this point N knew the bank wanted something, but chose not to get in touch. After another unanswered phone call, the bank wrote to N on 21 February. Mr W says he did not receive this letter, which was headed “Action required” in bold and referred clearly to both the overdraft and the BBL. It’s unfortunate that this wasn’t received. But I don’t consider it fair to hold NatWest responsible for the non-delivery of correctly addressed letters, given that the delivery of letters is undertaken by a postal service over which they have no control. The bank formally demanded full repayment of the BBL and the overdraft on 11 March 2025, giving N eight days to provide satisfactory repayment proposals. Mr W says he was on holiday at that point and didn’t receive the letters until he returned, which I believe was on 20 March. Again, this was unfortunate but does not indicate an error on the bank’s part. I appreciate that the bank’s action in this case feels harsh to Mr W, but I don’t consider I can reasonably conclude it was unfair. By the time NatWest transferred the accounts to its Recoveries department, N had had an unauthorised overdraft for over six weeks, during which time the bank had attempted to phone N twice and sent a text message and three letters. N, on the other hand, had made no attempt to contact NatWest, despite knowing the temporary overdraft had expired. 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 N to accept or reject my decision before 25 March 2026. Louise Bardell

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Ombudsman

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