Not upheld: mis-selling of government-backed business loan complaint against National Westminster Bank Plc

Decision detail

Summary

Ms P complained that National Westminster Bank mis-sold her a £119,000 government-backed business loan under the Enterprise Finance Guarantee scheme, claiming she was misled into thinking the government guarantee would protect her rather than the bank. The loan agreement contained Clause 1.5 explicitly stating the guarantee was given to the bank and Ms P remained liable for all sums, and Ms P had signed the EFG customer information document confirming this. Although an email from the bank dated 26 January 2018 contained ambiguous language about the loan being 'government backed', the ombudsman found the contractual terms were clear and unambiguous. The ombudsman did not uphold the complaint, finding that the loan terms were clearly documented and Ms P was not misled.

The Ombudsman's reasoning

The ombudsman found that Clause 1.5 of the loan agreement clearly stated the government guarantee was given to the bank and that Ms P remained liable for all loan payments. This clause was not obscure small print but a key part of the agreement. The statement advising Ms P to seek legal advice made clear the bank was not providing legal advice. The EFG customer information document, which Ms P signed, was consistent with the loan agreement terms. Although an email from the bank on 26 January 2018 could be interpreted as suggesting the guarantee protected Ms P, without proper context it could not fairly be concluded that it negated Clause 1.5 or that it was intended to mislead. The requirement for additional security over the business premises was not unusual and Ms P could have objected at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website