ROYAL Bank of Scotland (RBS) has been ordered to drop repossession proceedings against a family after watchdogs branded its actions “unfair” and “unreasonable”.

NatWest, part of the RBS group which is 70% owned by the taxpayer after its multi-billion-pound bailout, had demanded last September that Peter Addyman, a pharmacist from Hastings, East Sussex, and his wife, Marian, repay their entire mortgage within 30 days. This was despite the couple’s insistence that they had not missed any payments.

In a ruling early last week, the Financial Ombudsman Service said it was “not satisfied” by RBS’s order to repay the mortgage without giving an explanation. It said the bank had not treated the couple “fairly or reasonably”.

The Sunday Times highlighted the case last December after RBS demanded that the Addymans repay their £226,000 loan or face repossession. The bank suspended proceedings pending an adjudication by the ombudsman after intervention by Which?, the consumer group.

Despite an immediate appeal last week, the judgment was upheld by Clare Mortimer, the ombudsman, on Friday. She said: “There is no doubt in my mind that Mr and Mrs Addyman experienced a significant amount of distress and inconvenience following the bank’s request that they arrange a remortgage – despite the fact that the contractual payments due on the account were up to date and being made in full.”

NatWest was ordered to abandon the repossession and pay a sum in compensation.

Which? said: “NatWest’s behaviour in this instance has been particularly outrageous.” It has now written to the Financial Services Authority to look into RBS. “We are worried that this isn’t an isolated case,” it said.

In another case, RBS wrote to a homeowner who had missed just one payment on his mortgage, also ordering repayment within 30 days.

NatWest said: “We are disappointed that the ombudsman has not accepted our arguments.”

The Addymans said the bank’s behaviour had caused them “great distress”.