Leeds Building Society · DRN-6177821

The complaint Mr L complains that Leeds Building Society mismanaged his mortgage account. He says it demanded incorrect payments and was threatening, unfair and incompetent. Mr L would like an apology and assurance the errors will stop and that his credit file is not affected. Mr L asks that Leeds improves its processes, particularly with regard to vulnerable customers. What happened Mr L has a mortgage with Leeds. He applied for support with mortgage interest (SMI), a scheme whereby the government helps homeowners on certain benefits pay mortgage interest. Mr L started to receive payments of SMI from May 2025. Mr L says Leeds made numerous errors, including giving inconsistent information about what he had to pay, taking incorrect payments by direct debit, applying charges, and issuing threatening demands. Mr L says he’s lost significant time and peace of mind trying to put things right, and this impacted on his family life as a single parent. Our investigator said while Leeds had made errors, its offer of £300 compensation was fair. Mr L didn’t agree and asked that an ombudsman reconsider his complaint. 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. Mr L asked that we recommend Leeds improves its processes. That’s not something I can fairly do, as this service is not a regulator. Our role is to resolve disputes quickly and with minimal formality. I don’t have to respond to each point raised by Mr L. What I must do is explain my reasons for reaching my decision about what’s fair and reasonable in all the circumstances. My final decision will be published. I won’t set out events in more detail than necessary and I will round any numbers I refer to, as exact amounts could risk Mr L being identifiable. The events that led to Mr L’s complaint began in May 2025 when he started to receive SMI payments. The Department of Work and Pensions (DWP) made a backdated payment of about £4,000 into Mr L’s mortgage account in mid-May 2025. Most of this was refunded to Mr L, less an amount towards the payment due in May 2025. Mr L spoke to Leeds in mid-May 2025. Leeds said it hadn’t received confirmation of the amount of SMI. Mr L said he expected it to be about £325, and he expected it would be paid on the same day of the month that he received benefit payments. Leeds said, if the SMI was about £325 Mr L would need to make a monthly payment of about £310 to cover the shortfall. This was correct, as Mr L’s monthly payment at that time was about £635. Leeds

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said it would adjust Mr L’s direct debit. It was then agreed that Mr L would cancel the direct debit so that the May 2025 payment wouldn’t be taken. Leeds said it would set up a new direct debit for the payment due in mid-June 2025. Mr L took out a new product in mid-June 2025, due to take effect on 1 July 2025. Leeds wrote to him in mid-June 2025 saying that his new monthly payment from July 2025 would be about £610. Leeds wrote to Mr L in late June 2025 saying that the DWP had agreed to pay £325 per month, and the shortfall that Mr L would need to pay each month was about £285. Leeds says the SMI payment from the DWP was received late in June 2025. This resulted in its systems trying to take the full monthly payment by direct debit. Leeds wrote to Mr L in late June 2025 saying it had tried to take a direct debit payment in June 2025. As this had failed twice the direct debit had been cancelled. Mr L says he reversed the payment under the direct debit guarantee, as Leeds tried to take the full monthly payment. The mortgage statement provided by Mr L shows the unpaid/returned direct debit fee as zero in May 2025 and June 2025. Regardless of why the direct debit payment failed, Mr L still needed to make a payment in June 2025. Leeds wrote to Mr L in late June 2025 saying he’d missed a payment. That was correct. Mr L had not made the payment due in June 2025. Mr L says he received several letters from Leeds which set out different amounts owed, leaving him unable to work out what he was supposed to pay. While Leeds did send a number of letters, I don’t think this was due to errors. I think this was because Mr L’s product was due to expire at the end of June 2025, he took out a new product in mid-June 2025, and the SMI payments started at about this time. Mr L says Leeds sent a letter saying he had to pay about £770. I haven’t seen this letter, but based on what Leeds said this was most likely calculated on the basis the mortgage would go onto the standard variable rate. Mr L took out a new product in mid-June 2025 and Leeds wrote to him to confirm his new monthly payment after the new product took effect in July 2025. Leeds also sent a letter in late June 2025 setting out the payment he’d need to make in addition to the SMI from July 2025 (about £285). This amount was correct. Based on the available evidence, I can’t fairly find that Leeds gave Mr L incorrect information about the amount of his monthly payments, such that he was unable to make payments in June 2025 and in and from July 2025. However, I think Leeds should have told Mr L in mid-May 2025 that there might be a problem collecting a part payment via direct debit. It had another opportunity to tell him this when it wrote to him in late June 2025 telling him what he needed to pay in addition to the SMI. In early July 2025 Leeds did tell Mr L the direct debit might try to take the full monthly payment. It suggested he cancel the direct debit and set up a standing order for the shortfall amount. I think Leeds should have told Mr L this at the outset. This might have avoided the direct debit trying to take the full monthly payment in June 2025, and the inconvenience and upset that followed. I think it’s right that Leeds offered compensation for this. Ultimately, borrowers are responsible for making their mortgage payments. I appreciate Mr L’s frustration about the problems with the direct debit. But by early July 2025 Leeds had given him correct information about the amount of his monthly payments. It had told him the direct debit had been cancelled and it would be better to set up a standing order. So I think Mr L had the information he needed to set up a standing order or make manual payments of the correct amount.

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Mr L made a payment in early July 2025. This covered the payment due in June 2025 and brought the account up to date. However, Mr L didn’t set up a standing order or otherwise make the payments due in July 2025. I think Leeds’ second final response caused unnecessary confusion. It said the direct debit had been amended to reflect the part payment. That wasn’t the case and the direct debit was inactive. No payment was taken – or attempted – by direct debit in July 2025. Leeds wrote to Mr L again in late July 2025 saying he’d missed a payment. That was correct. Mr L hadn’t made the payment due in July 2025. It’s reasonable for lenders to expect borrowers to maintain mortgage payments. I don’t think the events complained about here made it unfair for Leeds to expect Mr L to maintain his mortgage payments (including while his complaint is with us). While there was some inconvenience to Mr L in having to set up a standing order that would have been the same if Leeds had given him correct information at the outset. Mr L is a vulnerable customer and Leeds needs to take this into account when it communicates with him. However Mr L still needs to maintain mortgage payments. If his financial situation means he’s struggling to do so, Mr L should contact Leeds to see what support it can offer. I think it’s fair for Leeds to notify Mr L when he misses a payment – as was the case in June 2025 and in July 2025 – and explain that mortgage arrears could affect his credit file. This gave Mr L the opportunity to bring his account up to date (if he had funds to do so) and so avoid adverse markers being reported to the credit reference agencies. I don’t think these letters amount to harassment. I understand Leeds has offered to send arrears letters to a trusted address, if Mr L would find this less upsetting. Leeds made errors, and I think it’s right that it offered compensation for the upset and inconvenience caused. But by early July 2025 I think Leeds had given Mr L sufficiently clear and understandable information about the amount of his monthly payments and how he can make them. It sent letters since then about the amount Mr L owes, including a table setting out the payments received and arrears total. Mr L asks that Leeds provides an itemised breakdown. I’m not sure what this would do, other than set out the payments due, the amounts received into the mortgage account and the amount of the arrears – information Mr L has already been given. I don’t think it’s fair to require Leeds to provide this. Leeds’ response to Mr L’s complaints Mr L says he sent several letters of complaint that Leeds ignored. While he said these were sent by signed-for post he didn’t provide evidence of this. Leeds says it didn’t receive all of these letters. I can’t fairly find that Leeds should have responded to letters it didn’t receive. Leeds sent a final response in early July 2025. Mr L wasn’t satisfied and wrote to Leeds again. Leeds sent a further response. There were errors in Leeds’ final response letters. For instance, the second final response said Mr L’s direct debit had been amended to collect the correct amount when it had in fact been cancelled. However I think Mr L was aware that payments were not being collected by direct debit. And Leeds sent a further letter confirming that it couldn’t collect payments by direct debit. I think Mr L was aware that he needed to make payments in a different way. A later letter referred to Mr L’s monthly payments as about 50p less than the correct amount. While frustrating, I don’t think any errors in the final

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response letters prevented Mr L making the payments due in and from July 2025. Events since Mr L brought his complaint to us I must be clear that, under our rules, what I’m looking into here is the complaint that Mr L raised with Leeds and brought to us in July 2025. Leeds says Mr L’s initial complaint didn’t include concerns about being a vulnerable customer. It says it has now noted Mr L’s vulnerable circumstances in its system and offered adjustments, such as sending arrears correspondence to a trusted address. It wrote to Mr L asking for his consent to note his health problems. If Mr L has further concerns about how Leeds communicates with him he should raise this with Leeds. Mr L says Leeds reported missed payments to the credit reference agencies, despite him having a complaint with us and making additional payments into his account. I don’t think the events complained about during the period May 2025 to July 2025 make it fair and reasonable for me to find that it’s unfair for Leeds to report adverse markers with the credit reference agencies some months later. I can’t fairly look into or make findings about events that happened after Mr L raised his complaint with Leeds and brought it to us (that is, after July 2025). That means I can’t look into any concerns Mr L has that the missed payments were reported unfairly or incorrectly, or that he’s otherwise been treated unfairly since July 2025. Putting things right Mr L was caused upset and inconvenience, some of which might have been avoided if Leeds had given him clear and correct information from the outset about how to make the shortfall payments. Mr L was also upset about errors in Leeds’ final responses. I think for the impact this had on Mr L, £300 compensation is fair and reasonable. It seems Leeds sent cheques to Mr L, which he said he didn’t cash. If that’s the case, and Mr L accepts my decision, Leeds should cancel those cheques and issue new cheques or make a payment into Mr L’s bank account. My final decision My decision is that Leeds should pay £300 to Mr L, as it offered to do. It can deduct any amounts already paid. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr L to accept or reject my decision before 24 March 2026. Ruth Stevenson Ombudsman

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