The Financial Ombudsman Service regularly publishes examples of cases it has recently overseen, showing why the FOS found the way it did. Here, Motor Finance republishes two recent motor finance-related case which the FOS detailed
Case study 129/11: Consumer complains that he wasn’t told important information about the sun-roof when he bought a new car
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Mr A bought a new car on finance from a local dealership. He’d sat in the test model in the showroom – but when his car was delivered he found there wasn’t enough headroom inside for him to drive comfortably.
Mr A took the car back to the dealership, which adjusted his seating position. When the problem persisted, the dealership then said the sunroof might be the cause of Mr A’s problem. According to the dealership’s technician, this had reduced the headroom in the car by nearly two inches in this model – but this was perfectly normal.
Mr A contacted the finance provider, saying he was unhappy that he hadn’t been told about this when he was deciding whether to buy the car. He was concerned that he’d never be able to drive his car comfortably.
The finance provider told Mr A that it was his responsibility to check that the car was suitable for him. They wouldn’t allow him to reject the car completely – but instead offered to part exchange it for another without a sunroof.
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By GlobalDataBut Mr A wanted a car with a sunroof – so when the finance provider refused to change its mind, he contacted us.
Complaint upheld
Mr A sent us a video of himself sitting in the driver’s seat of his car – showing that he wasn’t able to drive without leaning forward or to the side. We checked a number of independent websites and confirmed that installing a sunroof in the model Mr A had chosen would reduce the headroom by nearly two inches.
We asked to see the sales brochure that Mr A had been given. However, the space reduction wasn’t mentioned.
Mr A was around average height. This suggested the reduction in headroom could affect a significant number of people – so we thought it was important information that needed to be brought to customers’ attention.
In our view, we didn’t think it was reasonable to expect Mr A to know the impact of installing a sunroof in different models of cars.
We also noted that a newer sales brochure that Mr A sent us did mention the reduced headroom. So it seemed the car manufacturer now thought this was information customers needed to be given.
We decided that if Mr A had been told about the reduction in headroom, he wouldn’t have bought the car with the sunroof.
So we told the finance provider to cancel the agreement, refund the deposit Mr A had paid, adding interest – then to let him reject the car, writing off any remaining debt.
To reflect the discomfort Mr A had experienced while driving the car, we suggested the finance provider refund 30% of the any payments he’d made over that period. We also told it to pay £150 for the poor service Mr A had received.
Case study 129/7: Consumer complains that finance provider took car without her consent
When her hours were cut, Ms E began to experience financial difficulties – and missed a payment on her car hire purchase agreement. She contacted the finance provider, explaining she wanted to end the agreement under a "voluntary termination".
After a discussion about Ms E’s account history – including some unpaid arrears – it was agreed she would instead "voluntarily surrender" the car, allowing the finance provider to sell it at auction.
After the finance provider took the car a few days later, Ms E complained – saying she’d changed her mind.
She said the finance provider hadn’t had her written consent to take the car – and believed she was now entitled to all her money back.
The finance provider maintained it had had Ms E’s consent – and had followed the instructions she’d given. Ms E disagreed and contacted us.
Complaint not upheld
We looked at the terms of Ms E’s finance agreement. These said that if a vehicle was taken back without a court order or the customer’s consent, the customer had the right to get back any money paid under the agreement.
The finance provider hadn’t had a court order in Ms E’s case, so we needed evidence about whether she’d given her consent.
The finance provider sent recordings of the conversations it had with Ms E over the phone. In our view, when Ms E first called the finance provider, it had clearly explained her options – and she’d clearly agreed to surrender her car.
It appeared that Ms E had later phoned the finance provider asking for more time to think.
But she’d called the provider back the same day to say she wanted to go ahead, telling the provider where her car was parked.
From the finance provider’s records, we could also see it had asked Ms E to send her written consent to take the car. She’d rung back twice to check the provider had got it. And when she was told it hadn’t, she’d said she’d send another letter.
We appreciated that Ms E might have had second thoughts – and was disappointed about losing her car. But from what we’d seen, it was clear she’d wanted the voluntary surrender to go ahead before it actually happened.
We explained to Ms E that we didn’t think the finance provider had acted unfairly – or that she was entitled to her money back.
