Update I received a reply from the ombudsman who, despite me having sent them a copy of the limitation act and highlighting the appropriate section, still feels that a company has 12 years to chase you for arrears of interest. What other evidence can I send them as they apparently do not know the law, or what can I tell them to convince them that they only have 6 years? It amazes me that with the evidence in front of them in black and white, they still chose to either ignore it or haven’t got a clue about what the limitations act says. Any ideas appreciated.

Thanks DonkeyB and Nicklea. I'll have to inform the fos of their error and hope they correct it. I just assumed that the fos knew what the law was regarding statute barred!! The T&C did allow for costs to be added. The fos said that they believed that the company could ask for the money because the fos didn't feel that it was statute barred.

Just a normal secured loan, no defaults, CCJ's etc, just a few months arrears which were paid off with an agreed plan.

I had a secured loan where there were arrears, which led to extra costs and interest. The arrears were paid off and I received a letter detailing the outstanding amounts and showing that all the costs and interest had been paid. Then six years later they contacted me to say that there had been an error and wanted an extra £1,000 in costs and interest. I have taken this to the ombudsman who seems to think that it is ok for them to ask for this. I feel it is wrong that they can wait so long before informing me of the error. Am I fair in thinking this? This is the first stage with the ombudsman so I can still appeal this, which I will. I also believe that the interest is statute barred, but the ombudsman says that they have 12 years to chase it. The limitation Act 1980, section 20 states: “(5)Subject to subsections (6) and (7) below, no action to recover arrears of interest payable in respect of any sum of money secured by a mortgage or other charge or payable in respect of proceeds of the sale of land, or to recover damages in respect of such arrears shall be brought after the expiration of six years from the date on which the interest became due.” Am I reading this wrong?