Not upheld: Goods and services under S75 complaint against The Co-operative Bank PLC

Decision detail

Summary

Mr M purchased spray foam insulation from company S in January 2017 for £5,000, paying £1,500 via his Co-op credit card. After discovering issues with the installation in 2023 and obtaining a report in October 2024, Mr M raised a section 75 claim with The Co-op in March 2025 seeking a £5,000 refund and £8,000 for removal costs. The Co-op declined the claim, initially citing lack of necessary conditions for a valid section 75 claim and subsequently relying on the six-year limitation period under the Limitation Act 1980. The ombudsman upheld The Co-op's decision, finding that the claim was raised outside the limitation period and that Mr M had not provided sufficient evidence to establish exceptions to the limitation period based on fraud, concealment, or mistake.

The Ombudsman's reasoning

The ombudsman applied the six-year limitation period under the Limitation Act 1980 as the relevant timeframe for section 75 claims. The causes of action for both breach of contract and misrepresentation arose in January 2017 when the contract was entered into and the installation occurred. Since Mr M did not raise the section 75 claim until March 2025, it was raised outside the limitation period. While the ombudsman acknowledged potential exceptions under sections 14A and 32 of the Limitation Act (for negligence with hidden defects, fraud, concealment, or mistake), the evidence submitted by Mr M was insufficient to establish that any of these exceptions applied. The ombudsman distinguished between the limitation period for bringing a claim under section 75 to a creditor and the separate time limits for bringing complaints to the Financial Ombudsman under DISP rules. The ombudsman concluded it was fair and reasonable for The Co-op to decline the claim, though acknowledged the bank's initial reasoning regarding necessary conditions for a claim was unclear.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website