Not upheld: section 75 claim handling; limitation period defence complaint against Ikano Bank AB (publ)

Decision detail

Summary

Mr H complained about Ikano Bank's handling of his section 75 claim relating to defective spray foam insulation installed in April 2019. Mr H discovered the defects in February 2025 and raised the section 75 claim in August 2025, seeking a full refund plus removal costs. Ikano initially declined the claim citing insufficient evidence, then offered £500 compensation, and subsequently identified that the claim was time-barred under the Limitation Act 1980 six-year period. The ombudsman found that while the complaint about Ikano's handling was brought in time under FOS jurisdiction rules, the underlying section 75 claim itself was time-barred because the cause of action arose in April 2019. The ombudsman concluded that exceptions to the limitation period did not apply and that it was fair and reasonable for Ikano to decline the claim, with the £500 already paid being sufficient compensation for the handling issues.

The Ombudsman's reasoning

The ombudsman found that while the complaint about Ikano's handling was brought in time under FOS jurisdiction rules, the underlying section 75 claim itself was time-barred under the Limitation Act 1980. The cause of action for both breach of contract and misrepresentation arose in April 2019 when the contract was entered into and the installation was completed. Mr H did not raise the section 75 claim until August 2025, exceeding the six-year limitation period. Although Mr H only discovered the defects in February 2025, the ombudsman found that section 14A of the Limitation Act (which can extend time limits for negligence claims where facts are unknown) would not apply to breach of contract claims under section 75, and there was insufficient evidence of negligent misstatement or fraud to invoke other exceptions. The ombudsman concluded it was fair and reasonable for Ikano not to investigate or honour a claim raised outside the limitation period, consistent with longstanding FOS approach to section 75 claims.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website