Claire came to us after her bank had turned her down for a mortgage payment holiday because of Covid-19.
What happened
Claire was a guest house owner. Because of the Covid-19 pandemic and government restrictions at the time, she lost all her bookings. With the sudden and total loss of her income, she couldn’t afford to pay her mortgage on the property in which she also lived. So, she asked her bank for a mortgage holiday.
Claire said she knew other businesses in the area that had been given payment holidays. However, her bank told her it wasn’t suitable in her case and offered her a loan instead. Unhappy with this result, Claire came to us for advice.
What we said
When we spoke to the bank, it explained Claire hadn’t yet complained to them. But it agreed to work with us to address her concerns given the urgency of the circumstances.
The bank explained its position that mortgage holidays were given for home properties. Commercial properties and businesses were suitable for different government plans.
We explained that the suitability of mortgage payment holidays wasn’t just for residential customers. This meant Claire might qualify, depending on her other circumstances.
The bank apologised and explained its challenges in changing to the new Financial Conduct Authority (FCA) guidance at short notice. They said they would change their approach going forward.
We thought this was a fair and reasonable result. Not only was Claire’s problem resolved quickly, but further complaints arising from the same error would also be avoided.