Not upheld: unfair enforcement of commercial loans, receiver appointment, handling of company name change, redemption quotations, and application of sale proceeds complaint against Shawbrook Bank Limited
Financial Ombudsman decision DRN-6033855 of 2026-05-07T00:00:00+00:00. unfair enforcement of commercial loans, receiver appointment, handling of company name change, redemption quotations, and application of sale proceeds complaint against Shawbrook Bank Limited. Outcome: Not upheld.
Decision detail
| Reference | DRN-6033855 |
|---|---|
| Decision date | 2026-05-07T00:00:00+00:00 |
| Firm | Shawbrook Bank Limited |
| Product | Other regulated product |
| Claim type | unfair enforcement of commercial loans, receiver appointment, handling of company name change, redemption quotations, and application of sale proceeds |
| Outcome | Not upheld |
| Remedy | No further action required. The £100 compensation already offered by Shawbrook for the three-week delay in applying redemption proceeds was deemed fair and adequate. |
Summary
B, a limited company, complained that Shawbrook Bank Limited unfairly appointed Law of Property Act receivers over properties securing six commercial loans and made various errors in handling the loans. Shawbrook appointed the first receiver in April 2024 after B failed to pay longstanding service charge arrears, and appointed receivers over four additional properties in August 2024 after the guarantor's bankruptcy and unauthorized change in share ownership. The ombudsman found that Shawbrook had contractual rights to appoint receivers based on multiple termination events and that the bank's actions were fair and reasonable. Although the ombudsman identified a minor error in the bank's handling of the company name change and a three-week delay in applying redemption proceeds (for which £100 compensation was already offered), these errors did not materially contribute to B's claimed losses of approximately £300,000. The complaint was not upheld.
The Ombudsman's reasoning
The ombudsman found that Shawbrook had contractual rights to appoint receivers under clauses 7.1 and 7.2 of the loan terms, which specified termination events including arrears, insolvency events, and changes in beneficial ownership without consent. Multiple termination events existed: longstanding service charge arrears, charging orders, county court judgments, the guarantor's bankruptcy, and the change in share ownership without prior written consent. Although Shawbrook may have cited the name change as a reason, multiple other clear termination events justified the receiver appointments. The bank's requirement for anti-money laundering documentation before providing redemption figures was reasonable and not obstructive. While Shawbrook made an error in refusing to reinstate direct debits due to name change confusion, this did not materially contribute to the losses claimed, as other termination events independently justified the receiver appointments and B could pay by other means.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Shawbrook Bank Limited, all decisions | 2,486 | 17% |
| Other regulated product, all decisions | 52,408 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website