Upheld: Investment mis-selling complaint against Handelsbanken plc
Financial Ombudsman decision DRN-5761808 of 2026-01-19T00:00:00+00:00. Investment mis-selling complaint against Handelsbanken plc. Outcome: Upheld.
Decision detail
| Reference | DRN-5761808 |
|---|---|
| Decision date | 2026-01-19T00:00:00+00:00 |
| Firm | Handelsbanken plc |
| Product | Other regulated product |
| Claim type | Investment mis-selling |
| Outcome | Upheld |
| Remedy | Handelsbanken must: (1) restructure the loan to a variable rate (Bank of England base rate plus 2.2%) with original start and maturity dates; (2) refund the break cost already paid minus the £4,711 already refunded; (3) reimburse any difference if total payments made exceed total payments that would have been due on the replacement loan; (4) add compensatory interest at 8% simple per annum from the date costs arose to settlement; (5) apply no further break costs and charge no arrangement fee for the replacement loan; (6) preserve pre-payment fees, early repayment administration fees, and security discharge fees as specified in original terms. |
Summary
T, a company, complained that Handelsbanken mis-sold it a £1.425 million fixed rate commercial loan in September 2023. When T made early repayments in 2024, the bank charged break costs of £9,422, which T disputed. The ombudsman found that Handelsbanken failed to provide sufficient information about the potential for substantial break costs, with the pre-sale documentation being silent on the issue and the loan agreement containing only obscure references. Applying the Lending Standards Board's Standards of Lending Practice as the benchmark, the ombudsman concluded the bank's disclosure fell short of good industry practice. Given T's business involved potential property sales requiring large early repayments, the ombudsman found it likely T would have chosen a variable rate loan had it been properly informed. The complaint was upheld and the ombudsman required Handelsbanken to restructure the loan to a variable rate from inception, refund break costs paid, and provide compensatory interest.
The Ombudsman's reasoning
The ombudsman found that Handelsbanken failed to provide T with sufficient information to make an informed decision about the fixed rate loan, particularly regarding the potential for substantial break costs. The sections referring to break costs were obscurely worded with no attempt to draw attention to the particular risks of fixed rate lending. The ombudsman applied the Lending Standards Board's Standards of Lending Practice as the benchmark for good industry practice and concluded that the information provided fell short. Given that T's business involved the possibility of selling secured properties and making large early repayments, and given that a variable rate option was available, the ombudsman concluded it was most likely that T would have chosen a variable rate loan had it been properly informed about break costs. Therefore, the fair remedy was to restructure the loan as if it had been variable from the outset.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Handelsbanken plc, all decisions | 49 | 19% |
| Investment mis-selling, all decisions | 14,206 | 37% |
| Other regulated product, all decisions | 52,408 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website