Not upheld: Account administration errors complaint against Handelsbanken plc

Decision detail

Summary

Mr K, on behalf of business partnership A, complained to Handelsbanken about a 1% prepayment fee for early redemption, missing incentives on later loans, and an unfavorable interest rate on a specific loan. Handelsbanken explained that the loans were issued to the partnership as a whole, fees were contractually agreed, incentives came from the previous bank, and the interest rate resulted from the partnership's choice not to exercise the fixed rate option. The ombudsman upheld Handelsbanken's position, finding that all loans were issued to the partnership collectively with all partners jointly and severally liable, all fees and terms were clearly stipulated and accepted, and the partnership made informed choices regarding loan options. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that the loans were issued to the partnership collectively, not to individual partners, making all partners jointly and severally liable for all loans and fees. The prepayment fees and interest rates were clearly stipulated in the loan terms and conditions, which the partnership accepted by taking the loans. The partnership made informed choices regarding the loan options available, including choosing not to exercise the fixed rate option. Any informal arrangements between partners regarding individual loan responsibility are matters between the partners themselves and do not affect the legal nature of the loans or Handelsbanken's rights to charge fees as contractually agreed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website