Propensio Finance Limited · DRN-5665966

The complaint Miss C complains about the outcome of a claim she made under s.75 of the Consumer Credit Act 1974 (CCA) to Propensio Finance Limited (Propensio). What happened In July 2021, Miss C purchased spray foam insulation from a company I’ll call ‘W’. Miss C paid a £100 deposit, and the rest was financed using a fixed sum loan provided by Propensio. The total price was £2,750 and Miss C was required to make 36 monthly repayments of £87.16 to repay the loan. Miss C says that sometime later she became aware of potential issues with having spray foam installed. She therefore arranged for inspections to be carried out on the spray foam W had provided. Miss C says that as W had been rude and unhelpful, she contacted Propensio to raise a complaint. She said two separate professional bodies had inspected the spray foam and advised the work W had carried out wasn’t fit for purpose and the spray foam being present would eventually cause rot and mould due to there being no ventilation. Miss C added that due to this she now also wouldn’t be able to get a mortgage or release equity on her home Propensio responded to acknowledge Miss C’s complaint and asked for a copy of the inspections that had been carried out. On 19 November 2024 Propensio issued its final response rejecting Mr C’s complaint. Propensio said each mortgage provider has its own criteria for lending and it’s not seen any evidence every lender will always refuse an application due to the presence of spray foam on a person’s property. Propensio added the spray foam that had been installed at Miss C’s home was open cell composition that allows for breathable insulation which prevents mould. Unhappy with this Miss C referred her complaint to our service. She said the independent inspection had confirmed the spray foam hadn’t been installed correctly and would now cost around £6,000 to remove. Miss C added that W had mis-sold the spray foam by not explaining the risks to her home. One of our investigators considered the complaint. They said under s.75 of the CCA Propensio was responsible for any misrepresentation or breach of contract by W. Regarding misrepresentation, the investigator didn’t feel there was sufficient evidence for a successful claim. However, they did feel a breach of contract had occurred. This was due to the findings made in an inspection that had been carried out. A report was provided by a company I’ll call ‘H’, which said the spray foam had been installed incorrectly and had severely limited ventilation. H recommended that the spray foam should be removed at the earliest opportunity. The investigator therefore recommended that Propensio: • Unwind Miss C’s loan agreement and refund all payments she’d made towards it

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• Pay 8% simple interest on the repayments made • Remove any adverse information • Refund the cost of the report H provided • Pay reasonable costs for the removal of the spray foam Miss C agreed with the investigator’s findings, but Propensio did not. It provided further info from W from the time of the sale/installation. As Propensio didn’t agree, the complaint has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I would also like to point out I’ve read and considered the whole file, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on any specific point, it’s not because I’ve failed to take it on board and think about it but because I don’t think I need to comment on it in order to reach what I think is the right outcome. S.75 of the CCA is relevant here. In summary it allows, in limited circumstances, someone buying goods and/or services on credit to claim for a breach of contract or a misrepresentation against their credit provider when there is a like claim against the supplier. In this case Miss C paid for the spray foam and its installation via a fixed sum loan provided by Propensio. I’m satisfied the required conditions for a valid claim to have been raised under s.75 have also been met here. Therefore, Propensio is equally liable for any misrepresentation or breach of contract by W. Miss C has raised concerns regarding both misrepresentation and breach of contract. But in this decision, I’m only going to cover breach of contract. This is because I’m satisfied the evidence shows a breach of contract has occurred and that in itself is enough for me to uphold this complaint. The Consumer Rights Act 2015 (CRA) is also of relevance to this complaint, as it implies terms into the sales contract Miss C entered into with W. One of these implied terms is that the contract will be performed with ‘reasonable care and skill’. This isn’t directly defined but is usually taken to be the level of care and skill that would be expected in that particular industry. Here Miss C has provided an independent inspection report from a Royal Institute of Chartered Surveyors (RICS) member. This makes it quite clear that the spray foam hasn’t been installed correctly. It says: “Spray foam has been applied to the underside of the roof slopes and across the roof frames, which significantly limited the inspection of the structure. The Spray foam is open cell; however, this has been installed incorrectly. It has severely limited ventilation and the spray foam has been installed into the eaves blocking any ventilation.” The report also makes its clear the spray foam should be removed at the earliest

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opportunity. I’ve looked at the accreditation document that been provided. This seems to suggest in both the certificate and spray foam consumer guide that the roof space the spray foam is installed in needs to be ventilated. I appreciate the report from H doesn’t go on to say how the spray foam should’ve been installed to ensure adequate ventilation in Miss C’s loft or give further details. But it does say the installation has severely limited the ventilation and based on what I’ve seen here, that doesn’t appear to be correct. Propensio hasn’t provided comment on the report in its final response nor in reply to the investigators view that the complaint should be upheld. Its provided things like the satisfaction documents Miss C signed after installation and the risk assessment W carried out. But I haven’t been provided persuasive evidence that contradicts the report or shows that reasonable care and skill was used when W installed the spray foam into Miss C’s loft. It therefore follows that I feel a breach of contract has occurred for which Propensio is equally liable for under s.75. Given this I’ve considered how to put this right. The CRA mentions the right to specific remedies where it’s been found that reasonable care and skill hasn’t been carried out. One of these is the right to repeat performance to ensure the service conforms with the contract. I don’t believe this is a fair remedy in the circumstances, bearing in mind what the inspection report said about the spray foam being installed incorrectly and needing to be removed. I feel the right to a price reduction is the more appropriate remedy and I think that should equate to 100% of the full contract price. Therefore, Propensio should cancel the loan (if it’s still active) and refund Miss C her deposit and the payments she has made under the agreement. Propensio should add 8% simple interest from the date each of those payments were made, until date of settlement. If any adverse information has been recorded by Propension regarding this loan agreement, I also think it fair that is removed from Miss C’s credit file. This then leave the issue of the spray foam needing to be removed as recommended in the report. For this Propensio should arrange for the work to be carried out at its cost and within a reasonable period of time. Lastly, I think that Propensio should cover the cost of the inspection report H carried out on the provision that Miss C evidences what the cost was. Putting things right • Propensio should cancel Miss C’s loan agreement if it is still active and ensure no adverse information is recorded regarding it against Miss C’s credit file. • It should refund Miss C her deposit and all the repayments she’s made under the loan agreement. • Apply 8% simple interest to these refunds from the date each payment was made until the date of settlement. If Propensio considers it is required by HM Revenue & Customs to deduct income tax from that interest, it should tell Miss C how much it has taken off. It should also give her a tax deduction certificate if she asks for one, so they can reclaim the tax from HM Revenue & Customs if appropriate.

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• Propensio should arrange for the removal of the spray foam at no cost to Miss C and within a reasonable time period. • Upon receiving evidence of the price paid, Propensio should refund Miss C the cost of the independent inspection she received from H. My final decision I’m upholding Miss C’s complaint and direct Propensio Finance Limited to put things right in the way I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss C to accept or reject my decision before 30 September 2025. Paul Blower Ombudsman

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