Not upheld: personal guarantee process, irresponsible lending, unfair treatment of vulnerable customer, debt recovery practices complaint against New Wave Capital (trading as Capital on Tap)

Decision detail

Summary

Mr J complained about New Wave Capital's process in taking a personal guarantee for a £1,000 revolving credit facility (later increased to £5,000) for his limited company E, which had never traded. After E fell into arrears in July 2025 and Mr J entered a debt management plan, New Wave terminated the agreement in November 2025 and sold the debt to a third party in January 2026. Mr J claimed New Wave acted unfairly by not explaining the limit increase, not supporting him as a vulnerable customer, and selling the debt despite his financial difficulty. The ombudsman found New Wave provided clear documentation recommending independent legal advice, offered support channels Mr J did not use, was unaware of vulnerabilities until after the debt was sold, and acted within its contractual rights in selling the debt. The only error was failing to call back on 19 November 2025, for which £30 compensation was deemed appropriate.

The Ombudsman's reasoning

The ombudsman found that New Wave provided clear documentation recommending independent legal advice before signing the personal guarantee, and that Mr J had multiple channels to seek assistance if needed but did not do so. The ombudsman rejected the argument that New Wave should have identified vulnerabilities from financial difficulty alone, as vulnerabilities were not disclosed until after the debt was sold. The ombudsman also found that New Wave acted within its contractual rights and policy when selling the debt, and that it reasonably waited the 6 weeks Mr J requested before doing so. The only error was the failure to call back on 19 November 2025, for which £30 compensation was appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website