Not upheld: Other regulated complaint complaint against HSBC UK Bank Plc

Decision detail

Summary

Mrs and Mr S, directors of company C, complained that HSBC improperly held them liable under a personal guarantee for all of C's debts rather than just a specific facility, and that HSBC induced them to proceed without independent legal advice. HSBC had provided a business credit facility in late 2019 with a personal guarantee covering all present and future debts up to approximately £107,700. The ombudsman found the guarantee document was sufficiently clear in its scope, adequately communicated through the IMPORTANT notice on page 1, and that HSBC's waiver of the independent legal advice requirement was not an improper inducement as the recommendation remained in place. The ombudsman declined to address matters outside FOS jurisdiction such as enforceability and complaint handling, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that the guarantee document was sufficiently clear and unambiguous in setting out that it was an all-monies guarantee covering all present and future debts up to the stated limit. The IMPORTANT notice on page 1 adequately put Mrs and Mr S on notice of the scope of their personal liability. Although HSBC waived the requirement for independent legal advice, the recommendation remained in place, and it was Mrs and Mr S's choice not to seek such advice. The ombudsman rejected the characterisation of the waiver as an active inducement, noting that Mrs and Mr S made a conscious choice and must accept the consequences. The ombudsman also found that a representation made by an HSBC representative about when the guarantee might be called upon, while not perfectly aligned with the guarantee document, was not a determining factor and did not override the written guarantee terms. The ombudsman declined to comment on matters such as enforceability (a court matter), the handling of the complaint and data subject access request (outside FOS jurisdiction), discrepancies in demand letters (though noting HSBC should be more precise), and HSBC's treatment of the other guarantor (not party to the complaint and not affecting Mrs and Mr S's liability).

How this compares

Source

Read the original decision on the Financial Ombudsman Service website