Not upheld: Goods and services under S75 complaint against Ikano Bank AB (publ)

Decision detail

Summary

Mr N borrowed £4,900 from Ikano in October 2018 to pay for spray foam insulation installation. In November 2024, he raised a section 75 claim alleging the spray foam caused moisture damage and made his roof inaccessible, requesting a full refund. Ikano rejected the claim, ultimately relying on the argument that it was raised outside the six-year limitation period under The Limitation Act 1980. The ombudsman upheld Ikano's rejection as fair and reasonable, finding the causes of action accrued in October 2018 when the contract was entered into and installation occurred, making the November 2024 claim time-barred. However, the ombudsman found Ikano's handling of the claim process was suboptimal and awarded £500 compensation (£100 for poor handling and £400 reimbursement for the report Ikano had requested).

The Ombudsman's reasoning

The ombudsman applied The Limitation Act 1980 six-year limitation period as the fair and reasonable standard for section 75 claims, consistent with FOS longstanding approach. The alleged causes of action (breach of contract and misrepresentation) accrued in October 2018 when the contract was entered into and the installation occurred. The claim was not raised until November 2024, exceeding six years. The ombudsman rejected arguments that the limitation period should run from the date of inspection, finding that neither section 14A (negligence with hidden facts) nor section 32 (fraud, concealment, mistake) exceptions applied. The ombudsman acknowledged Mr N's sympathetic circumstances but found no grounds to direct Ikano to honour the time-barred claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website