Not upheld: unfair charges - passing on receivers' and lawyers' costs complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr H complained about approximately £57,000 in receivers' and lawyers' fees that HSBC debited to his business account following the appointment of Law of Property Act receivers in 2011. The complaint arose after Mr H's contracting company went into liquidation in 2006, causing financial difficulties. The ombudsman found that while receivers are not agents of the bank and their actions cannot be reviewed, HSBC was contractually entitled to pass on the fees under the loan agreement terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that receivers appointed by a bank are not agents of the bank, so the bank cannot be held responsible for the receiver's actions or the amount of fees charged. However, the bank can be held responsible for passing on those fees. The loan agreement explicitly permitted HSBC to pass on all costs, expenses and fees incurred in connection with enforcement of the facility. The fact that Mr H did not sign a separate agreement with the receiver in 2012 does not override the original loan agreement terms that Mr H did sign.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website