A bank had ignored a request for a bounce back loan by a business, causing payments to begin earlier than they had expected from the business.
What happened
A guest house complained that their request for a payment holiday on their Bounce Back Loan was ignored by their bank, causing payments to begin earlier than they’d planned. This occurred at a time when their cashflow was already struggling due to the continuing effects of the pandemic, causing an unauthorised overdraft.
What we said
We found that the guest house had completed the online form appropriately to request the payment holiday, as allowed under the Pay as You Grow options within the Bounce Back Loan Scheme. However, due to an administrative error by the bank, the application had not been registered in time for the initial repayments to be paused.
The bank had admitted this error and returned the payments that had been taken to its customer and put the payment holiday in place as requested. However, it hadn’t addressed the consequences of the error.
We said this wasn’t fair and required the bank to put the complainant fully into the position they would have been in had the request for a payment holiday been processed properly the first time. This included returning the overdraft fees and interest charged. We also required the bank to compensate the guest house for the inconvenience caused.