EE Limited · DRN-6218481

The complaint Miss E complains about the sale of a fixed sum loan agreement with EE Limited. What happened In July 2025, a fixed sum loan agreement in Miss E’s name was taken out with EE to buy a brand new mobile telephone handset, with a cash price of around £1,100. Under the agreement, Miss E was scheduled to make monthly repayments of about £30 over a three year period. Sitting alongside the loan, Miss E signed a contract for EE to provide her with airtime services. Miss E also sent her previous device to EE, and traded its value in exchange for a discount in the cost of her airtime services contract. After receiving her first bill, Miss E says she didn’t recognise the loan as something she had agreed to. She thought the handset was provided free of charge, when she took out the airtime services contract. So, Miss E complained to EE and asked to end both contracts, putting her in the position she was in before they were taken out. In their final response to Miss E’s complaint, EE agreed that during the sales call their advisor didn’t make it clear Miss E would need to make a payment to the loan, and a separate payment to the airtime services contract. So, EE said they would allow Miss E to return the new handset, cancel both contracts and revert to her previous airtime agreement. EE also paid £50 to Miss E’s bank account, for the distress and inconvenience they had caused. However, Miss E didn’t accept EE’s proposal. She wanted to keep the handset, as EE had already disposed of her previous device. So, Miss E said she would be at a disadvantage. EE didn’t change their view, so Miss E brought her complaint to this service. One of our investigators looked into Miss E’s case and found that EE needed to do more to put things right. She said EE should offer two options to Miss E. Firstly, the investigator said EE should pay Miss E an additional £100 for the distress she had experienced. And if Miss E wanted to return the handset, the investigator said EE should reimburse Miss E £150 for the loss of her previous device. If Miss E chose the second option, EE would be required to end the loan agreement, refund any repayments made and to remove any adverse information recorded on Miss E’s credit file. EE didn’t agree with the investigator’s findings and said they would be prepared to reimburse Miss E £100 for her previous device. They also said the payment they had already made for the distress caused to Miss E was appropriate. Miss E accepted the investigator’s findings and suggested she wanted to keep the handset. The investigator didn’t change her conclusions and Miss E’s complaint has now been passed to me to make a final decision.

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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. Miss E bought the brand new device using a regulated fixed sum loan agreement, and our service is able to deal with complaints relating to these sorts of agreements. From what I can see, EE was the supplier of the device as well as the creditor. A misrepresentation is, in very broad terms, a statement of law or of fact made by one party to a contract to the other, which is untrue. And which induces the other party into the contract. In Miss E’s case she says it wasn’t clear during the sales call, that she would need to pay separately for the handset. And if she had known, she would not have entered the loan agreement. EE have accepted Miss E’s arguments and agreed she should be allowed a remedy to put things right. So, my role here is to decide if the solutions put forward by EE fairly settle Miss E’s concerns. Firstly, I’ve thought about the worry and trouble caused to Miss E, when she was given incorrect information by EE. I can see that Miss E was left in a position where she couldn’t get her previous device back from EE. And where she needed to contact EE, to find out why there were separate payments due. So, above all else, I think Miss E was caused distress and inconvenience by EE. To recognise the trouble Miss E was put to, EE made a payment of £50 to her bank account. Having thought about the impact on Miss E and the confusion EE created, I think it’s fair for EE increase that award. After considering all the evidence, I think an additional payment of £100 fairly reflects the distress and inconvenience Miss E has told us about. In instances where there has been a misrepresentation the remedy is to try, as far as possible, to put a consumer back in the position they would have been in had the incorrect information not occurred. The remedy isn’t to put a consumer in the position as if the incorrect information had been true. This means I don’t think it’s fair for me to require EE to allow Miss E to keep the new handset without paying for it. EE’s offer to Miss E allows her to return the handset and close the fixed sum loan agreement. So, I think EE’s offer goes part way to providing an appropriate remedy in the circumstances. However, I also think EE should take further steps, if Miss E chooses to give the handset back. I realise that Miss E is likely to have used the handset in the first month after EE supplied the device to her. It follows that she would have done so, until she says she discovered the loan used to pay for it. I’ve seen nothing to indicate where Miss E may have continued her use of the handset. So, on balance, I think it’s fair for EE to refund the repayments made by Miss E since the start of the fixed sum loan agreement. Furthermore, it remains that Mis E will be without her previous device, if she chooses to give back the handset supplied in July 2025. This is because EE traded her previous device. I’m aware that EE have used the proceeds to offset some of Miss E’s airtime services costs. So, I think Miss E has benefitted from some of the value of her previous handset. And she may continue to benefit from that value, if she decides to keep the fixed sum loan agreement. But, EE have suggested that if Miss E chooses to end her agreement, she’ll no longer benefit from the monthly discount to her airtime services contract. This will leave Miss E with

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a shortfall. Having considered the value of Miss E’s previous device, I agree with the investigator in that I think it’s fair for EE to reimburse Miss E £150 for the loss of the device she traded to them. In light of my conclusions about the ending of the agreement and the refund of repayments, I don’t think it would be fair for Miss E to suffer from any adverse information EE may have recorded with credit reference agencies. I’ve seen nothing to say EE have done this and they have said Miss E’s accounts are all up to date. But, I think EE should remove any information they may have passed on to those agencies, about the fixed sum loan agreement in Miss E’s name. However, Miss E has told us that the most convenient things for her to do is to keep the handset. In this instance, I think EE should only be required to pay Miss E the additional £100 for the distress and inconvenience she has experienced. To be clear, the other four parts of the settlement I’ve suggested will only become relevant if Miss E chooses to hand back the most recent device to EE. Putting things right For these reasons, I require EE Limited to: • Pay Miss E an additional £100 in recognition of the distress and inconvenience she has experienced. If Miss E would like to return the handset, then EE Limited should also: 1. Allow Miss E to exit the fixed sum loan and airtime services agreements, and return the handset she received from EE, at no additional cost to her; 2. Remove any adverse information about the fixed sum loan agreement, from the details held with credit reference agencies about Miss E; 3. Refund all the repayments to Miss E, that she has made under the fixed sum loan agreement, from the start of the agreement to the date of settlement of this complaint; and 4. Reimburse £150 to Miss E, for the loss of her previous device. EE must pay these amounts within 28 days of the date on which we tell them Miss E accepts my final decision. If they pay later than this, they must also pay interest on the settlement amount from the date of final decision to the date of payment at 8% a year simple. If EE deducts tax from any interest they pay to Miss E, they should provide Miss E with a tax deduction certificate if she asks for one, so she can reclaim the tax from the tax authorities if appropriate. My final decision My final decision is that I uphold this complaint and require EE Limited to put things right as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss E to accept or reject my decision before 27 April 2026.

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Sam Wedderburn Ombudsman

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