Not upheld: Guarantor loan complaints complaint against New Wave Capital Limited trading as Capital on Tap (CoT)

Decision detail

Summary

Mr M, director of company J, complained that CoT mis-sold a personal guarantee dated 13 January 2020 and acted unfairly in recovering J's debt from him personally when the facility fell into arrears in April 2025. The ombudsman found that the guarantee document contained sufficiently clear warnings of personal liability and recommended independent legal advice, placing Mr M on adequate notice. CoT's request for bank statements to verify the sustainability of Mr M's proposed £300 monthly repayment was a reasonable judgment call, and the subsequent decision to terminate the facility and sell the debt to a third party was within CoT's contractual rights and not unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test and concluded that the guarantee document contained sufficiently clear and unambiguous language to put Mr M on notice of his personal liability. The document explicitly warned that he might become personally liable and recommended independent legal advice. CoT was not obligated to provide advice on the guarantee's effect, and Mr M's choice not to seek independent legal advice could not be held against CoT. Regarding recovery actions, CoT's request for bank statements to verify the sustainability of the proposed £300 monthly payment was a legitimate and reasonable judgment call. The decision to terminate the facility and sell the debt, made after Mr M failed to provide requested information, was within CoT's rights under section 3.6 of the facility agreement and was not unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website