Not upheld: misinformation regarding early repayment charge duration complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr W, as director and guarantor of company M, complained that Shawbrook Bank incorrectly informed him in November 2023 that an early repayment charge (ERC) on M's commercial mortgage ran for three years rather than the contractual five years. Mr W argued this misinformation influenced the timing of a refinancing exercise in mid-2025, causing financial loss to M. Shawbrook admitted the error and paid £200 compensation. The ombudsman found that while the misinformation was wrong, Mr W failed to prove on the balance of probabilities that M would have refinanced immediately with correct information, and rejected arguments informed by hindsight. The complaint was not upheld and the £200 payment was deemed fair compensation.

The Ombudsman's reasoning

The ombudsman applied a balance of probabilities test to determine whether M would have refinanced immediately had correct information been provided. While the misinformation was acknowledged, Mr W's argument that M would have acted differently was found to be at best equally as likely as what actually occurred, which is insufficient to meet the legal threshold. The ombudsman rejected speculation beyond what the evidence supported and noted that Mr W's current argument was informed by hindsight knowledge of market movements between November 2023 and May 2025 that would not have been available at the time of the phone call.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website