Not upheld: Service failures generally complaint against New Wave Capital Limited trading as Capital on Tap

Decision detail

Summary

X, a limited company, complained that Capital on Tap unfairly refused to reduce the interest rate on its business credit card and failed to provide transparent explanations, particularly given lower rates advertised to new customers. X had applied for the card in February 2022 with agreed terms including variable interest rates from September 2022 onwards. From January 2024, Mr J made multiple requests for rate reductions citing financial pressure, but Capital on Tap declined all requests based on internal criteria they would not disclose. The ombudsman found that Capital on Tap acted fairly in making commercial pricing decisions, that different rates for different customers is standard practice, and that lenders are entitled to rely on commercially sensitive assessment models without full disclosure. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the interest rate was clearly disclosed and formed part of the agreed contractual terms. Capital on Tap is entitled to make commercial decisions about rate reductions based on internal criteria, which is standard industry practice. While the ombudsman understood the frustration about lack of transparency, lenders are entitled to rely on commercially sensitive credit assessment models and are not generally required to disclose detailed workings. The ombudsman found no evidence that Capital on Tap failed to act on clear indicators of financial difficulty, as X continued to meet repayment obligations and did not explicitly declare financial difficulty. The fact that X struggled to obtain alternative finance or felt trapped was not due to Capital on Tap's actions but reflected wider market conditions and X's own commercial circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website