Not upheld: mis-selling and unfair interest rates complaint against Iwoca Ltd

Decision detail

Summary

W, a company, complained that Iwoca Ltd mis-sold it a flexible loan facility with an extortionate interest rate of 5.150% per 30 days plus a 7% borrowing fee. W borrowed up to £31,000 but faced total repayment exceeding £57,000. The ombudsman found the loan agreement clearly set out all terms including the interest rate, fees, and payment schedule, and that W was not misled. The ombudsman declined to interfere with Iwoca's pricing policy, noting it was for Iwoca to set rates and for W to decide whether to accept them. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that although the facility was unregulated, the agreement clearly set out the borrowing limit, interest rate, fees, and monthly payment amounts. W was not misled about the terms. The ombudsman declined to interfere with Iwoca's pricing policy, noting that it was for Iwoca to decide the lending rate and for W to decide whether to accept those terms. The fact that the total repayment significantly exceeded the amount borrowed does not constitute unfair treatment if the terms were transparent.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website