Guest essay by Eric Worrall
h/t JoNova – The UK financial ombudsman has ruled that a bank must rework a credit agreement for a home solar installation which was sold based on misleading information.
… Mr L told us he’d been ripped off by a company selling solar panels.
He explained he was told the panels would be “self-funding”. He’d used his savings to cover some of the costs of having the panels installed, and had signed up to a credit agreement to pay for the rest.
Mr L said he’d soon realised the panels weren’t saving him any money. He’d already complained to the credit provider, who didn’t agree that the benefits had been misrepresented. Mr L didn’t agree, and asked us to look into what had happened.
putting things right
Mr L told us that the salesperson promised his loan repayments would be totally covered by the benefits of his solar panel system – through “feed- in tariff” payments and the savings made on his electricity bills. He explained the salesperson said the solar panels were “better than free”. But in reality, there was a shortfall between what he was paying out and what he was getting back.
We looked at the paperwork Mr L had been given explaining the benefits he’d receive. The documentation wasn’t complete – and in our view, the information wasn’t clear. This meant Mr L would have been relying on what the installer told him, rather than on the paperwork, to understand what he was signing up to.
We then looked at what Mr L was actually getting back. We found that – instead of the situation being self-funding – he was nearly £1,000 a year out of pocket.
All in all, we decided there was clear evidence of misrepresentation on the installer’s part. And we didn’t think Mr L would have agreed to have the panels installed if he’d realised that, rather than being “self-funding”, the panels would actually leave him worse off.
We carefully considered how to put things right in Mr L’s individual circumstances.
In this case, it seemed Mr L was happy to have the solar panels, but was unhappy that they weren’t self-funding. Following our involvement, the credit provider offered to reduce the loan slightly – and to allow Mr L to keep the panels.
However, we didn’t think this was enough. We told the credit provider to rework the loan – so Mr L wouldn’t pay any more for the panels than the potential savings they’d make over the long term. …
This ruling potentially opens the way for redress for anyone in Britain who feels they were pressured into signing up for a solar installation loan which is returning less than the loan repayments. The ruling may even have implications for people in the USA, Australia or other countries with similar legal systems – courts sometimes take note of comparable rulings which occurred in foreign cases.
My suggestion – if you are in financial difficulties because of a loan for home solar products which have not delivered the promised returns, especially if you live in the UK, talk to your ombudsman or talk to a lawyer. Make sure you show them a copy of this ruling.