Not upheld: interest rate disclosure and application process clarity complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr R complained that HSBC applied a higher interest rate to his personal loan than the 7.4% rate he believed he had agreed to. Mr R applied for the loan via the HSBC mobile app on 28 May 2025, saw a 7.4% rate during the pre-application stage, accepted the loan at 8:03 am, and immediately used the funds to purchase a car at 8:32 am. He later discovered the actual rate was higher and claimed he was never shown or notified of the change. The ombudsman initially provisionally upheld the complaint due to HSBC's failure to provide evidence of how the higher rate was displayed. However, after HSBC provided detailed customer-journey screenshots showing the higher rate was clearly displayed on multiple occasions before acceptance, the ombudsman reversed the decision and found that Mr R should reasonably have understood the correct interest rate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman initially found in Mr R's favour based on lack of evidence showing how the higher rate was displayed. However, upon receipt of customer-journey screenshots from HSBC, the ombudsman reconsidered and found that the higher interest rate was clearly displayed to Mr R on multiple occasions throughout the application process before he accepted the loan. The screenshots showed the initial representative rate was clearly marked as such, and the higher offered rate was prominently displayed after the credit check, in the key points information, in the pre-contract credit information, and in the loan agreement. The ombudsman concluded that Mr R should reasonably have understood the correct interest rate from the information presented, even if he did not actually notice or understand it. The ombudsman also noted that Mr R's immediate use of the funds for the car purchase meant he could not have realistically exercised the cooling-off period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website