Upheld: Section 75 claim - breach of contract in service provision (defective installation) complaint against Ikano Bank AB (publ)
Financial Ombudsman decision DRN-5882212 of 2026-06-04T00:00:00+00:00. Section 75 claim - breach of contract in service provision (defective installation) complaint against Ikano Bank AB (publ). Outcome: Upheld.
Decision detail
| Reference | DRN-5882212 |
|---|---|
| Decision date | 2026-06-04T00:00:00+00:00 |
| Firm | Ikano Bank AB (publ) |
| Product | Personal loan |
| Claim type | Section 75 claim - breach of contract in service provision (defective installation) |
| Outcome | Upheld |
| Remedy | Ikano Bank AB (publ) must: (1) Cancel Ms B's loan agreement if still active and remove any adverse credit file information; (2) Refund all loan repayments made by Ms B; (3) Refund the £1,000 deposit paid to C; (4) Add 8% simple interest to all refunds from date of payment until settlement; (5) Arrange removal of spray foam at Ikano's cost within reasonable timeframe while preserving existing insulation; (6) Pay £200 compensation for delays in handling the Section 75 claim. |
Summary
Ms B financed spray foam insulation installation via a loan from Ikano in 2020. In 2024, she raised a Section 75 claim alleging the installation caused damp damage and made her property unmortgageable. An independent inspection confirmed the installation was substandard, breaching multiple BBA Certificate requirements including inadequate depth, improper ventilation design, and application to unsuitable surfaces, resulting in high moisture levels (30-40%) in the loft. Ikano initially offered partial remedial funding, but the ombudsman found this insufficient given the multiple serious defects. The ombudsman upheld the complaint, ordering Ikano to refund the full contract price with interest, cancel the loan, arrange removal of the spray foam at their cost, and pay £200 compensation for delays in handling the claim.
The Ombudsman's reasoning
The ombudsman found that company C breached its contractual obligation to provide services with reasonable care and skill under the Consumer Rights Act 2015. The independent inspection confirmed multiple failures to comply with the BBA Certificate and substandard installation. While rectification works might theoretically remedy the breach, the ombudsman lacked confidence that such works could be properly carried out given the significant multiple issues identified. The ombudsman determined that a price reduction remedy (100% refund) was more appropriate than attempted rectification, particularly given Ms B had adequate insulation before the defective installation and the hybrid roof created by leaving existing insulation in place caused ongoing moisture damage risk.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Ikano Bank AB (publ), all decisions | 397 | 48% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website