Upheld: Service failures generally complaint against Gatehouse Bank Plc

Decision detail

Summary

Mr K and Mrs B complained that Gatehouse Bank Plc sold them a Sharia mortgage without fully informing them about potential tax implications, despite asking about this upfront. They were only told of possible capital gains tax consequences at offer stage, after incurring £793 in non-refundable fees. Concerned about the tax liability, they withdrew from the transaction. The ombudsman upheld the complaint, finding that Gatehouse, as the professional party aware of these implications, should have disclosed the need for specialist tax advice at the outset to enable an informed decision. Gatehouse was ordered to refund the fees and pay £150 compensation.

The Ombudsman's reasoning

Gatehouse has an obligation to communicate clearly, fairly and not misleadingly, and to treat customers fairly. While Gatehouse is not responsible for providing specific tax advice, as the professional party aware of the potential tax implications specific to this structure, it should have informed Mr K and Mrs B upfront that they must seek specialist tax advice before committing. The information was only provided at offer stage, which was too late for an informed decision. Mr K and Mrs B should have been given all available information from the outset.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website