National Westminster Bank Public Limited Company · DRN-5980036

The complaint Miss B complains that National Westminster Bank Public Limited Company defaulted her current account. What happened My provisional decision of 5 March 2026 set out the background to this complaint: “In 2022, Miss B’s NatWest current account ending 996 was held jointly with her ex-partner. Her ex-partner used the account ending 996 for gambling transactions, which prompted Miss B to complain. In December 2024, Miss B switched her current account ending 627 to another bank. This left an outstanding balance owed to it. NatWest said it sent several texts alerting her to the outstanding balance owed and asked her to get in touch. NatWest sent a demand for repayment on 17 January 2025. Miss B called NatWest on 18 January 2025 but the line dropped. NatWest called Miss B back but couldn’t reach her. NatWest passed her account to a debt collections agency that I’ll refer to as ‘X’ and sent her a letter to confirm this. Miss B made a repayment of £50 to X in March 2025 and offered to make further repayments of £50 per month. X said it reviewed the information given by Miss B about her income and expenditure, which showed she had £2 a month disposable income. In May 2025, NatWest went on to record the account ending 627 as in default. After discovering the default, Miss B complained to NatWest. In August 2025, NatWest told Miss B it had already responded to her complaint about gambling transactions on the account ending 996 in 2023 and 2024, so it wouldn’t respond again. Turning to her complaint about the default on her account ending 627, NatWest said it sent a default notice in January 2025 and would not remove the default from her credit file. However, NatWest then acknowledged it hadn’t responded within the required timescales and offered her £200 compensation. Unhappy with this response, Miss B referred her complaint to our service. One of our investigators reviewed the complaint but didn’t uphold it. Miss B remained unhappy, saying NatWest had breached its Consumer Duty and had treated her unfairly. So, this has come to me for a decision.” I then set out my provisional findings: “I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Miss B has explained the difficult circumstances she experienced with her ex-partner, which I haven’t disclosed here to protect her privacy. Whilst I have noted what she’s told me, I’ve not considered her complaint about the gambling transactions on her account ending 996 as this was responded to by our service under a separate complaint reference. I also note her

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comments that NatWest previously removed a default from her account. I’ve not considered any previous defaults recorded by NatWest, which may have been recorded on her account ending 966. So, this complaint will only address Miss B’s concerns her account ending 627 and whether NatWest was entitled to record it as in default on her credit file in May 2025. I’ve reviewed the ‘default notice’ NatWest says it sent in January 2025. This is a demand for repayment and not a valid default notice, as Miss B has already identified. So, I’ve thought about what would likely have happened if NatWest had sent a valid default notice. NatWest’s demand letter let her know she needed to get in touch to repay her overdraft or agree an acceptable repayment arrangement by 20 February 2025. The letter was correctly addressed, and NatWest has provided a screenshot that confirms it was posted in January 2025. So, whilst Miss B may not have received the letter, I’m satisfied it was sent. Overdrafts are repayable on demand, and NatWest made it clear its letter was demanding its repayment by 20 February 2025. Its letter let her know it would report any non-payment to the credit reference agencies. However, NatWest didn’t hear from Miss B. It then wrote to her to let her know her account had been passed to X but the outstanding balance was still not repaid. Given NatWest had given Miss B a deadline to repay what she owed and warned her a failure to do so may impact her credit file, I don’t think it’s clear that a default notice in the required format would have made a significant difference to the outcome of this complaint. It’s not clear that if NatWest had sent a valid default notice, Miss B would have been able to repay what was owed to avoid a default. As I said above, overdrafts are repayable on demand and by May 2025, Miss B said she could only repay £50 per month. This would take her around 20 months to repay the outstanding balance owed. X noted the income and expenditure information she gave showed she could only afford £2 per month on an ongoing basis. In either event, it’s not clear Miss B could afford to repay the outstanding balance owed to it in the short-term and, by May 2025, the overdraft had been outstanding for around six months. The guidance provided by the Information Commissioner’s Office (ICO) sets out that NatWest should have defaulted her account once three to six months of arrears had accrued. As here was no indication Miss B was able to repay what she owed within this timescale, I think NatWest’s decision to record the account in default in May 2025 was in line with the ICO’s guidance. I don’t think the default was in breach of any of its obligations to her as a vulnerable consumer or to treat her fairly. Overall, I think NatWest was entitled to record the account as in default in May 2025 and I don’t think the default breached its Consumer Duty to Miss B or treats her, as a vulnerable customer, unfairly. Whilst I realise my decision will disappoint Miss B and understand the impact the default has had on her, I don’t think NatWest is obliged to remove the default or pay her any compensation for the information recorded on her credit file. NatWest acknowledged it took too long to respond to Miss B’s complaint and offered her £200 compensation. In the circumstances of this complaint, I think NatWest’s offer is fair and I’ve not recommended it pay additional compensation for this error.” Miss B didn’t accept my provisional decision. In summary, she said she wasn’t made aware her account would default. She said she agreed a repayment plan with the debt collection agency from March 2025 and went on to repay the balance in full in January 2026. She said

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the ICO’s guidance indicates a default is normally intended to reflect a breakdown in the relationship between the lender and borrower but, in her case, she was making repayments. Miss B felt NatWest’s actions breached its Consumer Duty to her and said it had breached its obligations to respond to her complaint within eight weeks. 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, my provisional decision remains unchanged but I’ll address Miss B’s response to it. Miss B says she wasn’t made aware her account would default. Whilst the final demand made it clear any non-payment would be reported to the credit reference agencies, I agree with her that it didn’t explicitly say her account would default. This is why, in my provisional decision, I considered what I thought would likely have happened if a valid default notice had been sent. I appreciate Miss B says that the ICO’s guidance indicates a default is generally intended to reflect a breakdown in a lender’s relationship with a borrower. In any event, and as I said in my provisional decision, the guidance also sets out that a default should be recorded once three to six months of arrears have accrued. This applies even where a consumer is engaged with a lender but can’t repay their arrears and maintain their contractual repayments. Given Miss B’s overdraft had been outstanding since December 2024, I would have expected NatWest to default the account if the arrears could not be repaid in full by June 2024. Miss B had indicated she couldn’t afford to do this. So, even if she was repaying £50 per month, I still think it was likely her account would have defaulted. Overall, I remain of the view NatWest was entitled to default her account in May 2025. Miss B reiterated her belief that NatWest breached its Consumer Duty to her. My provisional decision said I don’t think NatWest was in breach of its Consumer Duty, as I think it was entitled to record her account as in default. The Consumer Duty does not prevent NatWest from acting in line with the ICO’s guidance and recording an account as in default. I agree with Miss B that NatWest took too long to resolve her complaint. She referred it to us in July 2025, and NatWest didn’t issue its final response until August 2025. I appreciate the delay in issuing the final response caused Miss B some additional stress. However, given I think NatWest’s decision not to remove the default was reasonable, I don’t think she’s been caused any financial loss as a result of the delay. Overall, I remain of the view that NatWest’s payment of £200 compensation was fair in all the circumstances of her complaint. My final decision National Westminster Bank Public Limited Company has already made an offer to pay £200 to settle the complaint and I think this offer is fair in all the circumstances. So, my final decision is that National Westminster Bank Public Limited Company should pay Miss B £200, if it has not already done so. If the compensation has already been paid, nothing further is payable. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss B to accept or reject my decision before 20 April 2026.

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Victoria Blackwood Ombudsman

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