Partially upheld: mis-selling, unfair account closure, improper settlement fund withholding complaint against Teya Solutions Ltd

Decision detail

Summary

T complained that Teya Solutions Ltd mis-sold a payment terminal by presenting it as a purchase when it was actually a three-year hire agreement, conducted excessive compliance checks, and unfairly closed T's merchant account without notice while withholding settlement funds. Teya claimed they followed contractual terms and had legitimate fraud concerns. The ombudsman upheld the complaint in part, finding that while Teya had the right to close the account, they failed to exercise this discretion fairly by not providing notice and without persuasive evidence of fraud. The ombudsman ordered Teya to refund the terminal payment, pay £150 compensation for reputational damage, and confirmed the previously paid interest on withheld settlements was fair.

The Ombudsman's reasoning

The ombudsman found that while Teya had the contractual right to close the account under Clause 6.2, they failed to exercise this discretion fairly and reasonably by not providing notice. Although Teya cited fraud concerns, the ombudsman found no persuasive evidence to support that T was engaged in fraudulent activities. The ombudsman agreed with the investigator that the terminal agreement was not clearly explained, settlements were withheld beyond the appropriate timeframe, and the account closure without notice caused inconvenience and reputational damage to T. The £150 compensation was deemed fair given the impact on T's business, despite T's delay in obtaining alternative services.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website