The Financial Ombudsman Service regularly publishes examples of cases it has recently overseen, showing why the FOS found the way it did. Here are two such motor finance-related cases
With all of the UK’s more than 30 million cars needing to be insured to drive, it’s not surprising we regularly hear from people having problems with their insurance. What’s more, many of those cars have been bought or hired with some kind of finance arrangement. In these cases, we at the Financial Ombudsman Service can often help when something’s gone wrong with the car or how it was sold.
Many of the problems we deal with today are about similar issues to those we’ve dealt with since we were set up. We continue to give answers on unpaid claims, fair valuations and the quality of new cars.
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And poor communication continues to be an underlying problem in a number of the complaints people bring to us. But while some things haven’t changed, developments in technology, for example, mean the individual factors we’d expect a business to consider have changed – while continuing to follow our fair and reasonable approach to sorting things out.
In many of the complaints we deal with, we find a business hasn’t acted unfairly – but they could have explained things more simply or clearly. Falling back on jargon like “misrepresentation” or “fault claim” can leave people feeling confused or frustrated. On the other hand, we often find that by making things more straightforward, people understand – and are more likely to accept – the outcome.
The following case studies highlight the range of issues we see. We’ve recently added more information to our website about the most common complaints we receive involving cars – and our approach to putting things right when something’s gone wrong.
Consumer complains that hire company has charged too much for damage to car
When Mr V reached the end of the finance agreement on his car, he returned the car to the hire company he’d leased it from. The company contacted him to confirm his contract had ended. And they also sent him a bill with some additional charges.
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By GlobalDataMr V wasn’t happy with all the charges – in particular, £350 relating to damage to the roof of the car. When he asked for more information, the company told him there were dents in the roof. They said they’d made it clear that Mr V would be charged for this kind of damage.
Mr V maintained that he hadn’t damaged the car’s roof. But when the company insisted he pay the charge, he asked us for help.
Complaint upheld
Mr V told us he’d known he’d scratched the front of the car – and he’d expected to pay for this, as well as for extra mileage.
But he said the hire company hadn’t given him much information about the damage to the roof. They’d only told him the roof was dented in three places – and that their policy allowed up to two dents.
We asked to see the paperwork the hire company had given Mr V. This explained that the company considered “fair wear and tear” to the roof as a maximum of two dents – each no longer than 2cm.
The hire company sent us photos they’d taken during their inspection of the car.
They’d highlighted three areas where they said the roof was damaged – with a ruler next to the dents they’d identified.
But looking at the photos, we could only see two dents. And going by the ruler in the images, each of these was only around 2cm long. We asked the hire company if they had any other photos that showed the third dent they’d identified. But they said they’d given us the only photos they had.
From what we’d seen, the dents on Mr V’s car fell under “fair wear and tear” – as set out in his contract. In the circumstances, we told the hire company to waive the £350 charge relating to the dents.
Consumers complain that finance company won’t refund payments and let them return faulty car
Mr and Mrs B bought a used car on a hire purchase agreement – but soon began to have problems with it. Over the next couple of months, they arranged a number of repairs at the garage they’d bought it from – but these were all unsuccessful.
Mr and Mrs B then contacted the finance provider, who arranged for an engineer to inspect the car. The engineer found that the car’s suspension was faulty, the brake pads were worn and there was an oil leak in the gearbox. He said that, in his view, the faults would have been there when the car was sold.
The finance provider agreed to fix the oil leak. But they said the fact that Mr and Mrs B had already driven a few thousand miles in the car showed it must have been working properly when they bought it.
Mr and Mrs B insisted the car hadn’t run properly since they’d taken it home – and that they wanted to return it and get back the money they’d paid. When the finance provider refused, they complained to us.
Complaint upheld
We asked the finance provider for their records of the repairs and the inspections that had been carried out on the car. Looking at the history of the repairs, we thought it was clear that Mr and Mrs B had experienced difficulties very soon after buying the car. The repairs arranged by the garage hadn’t fixed the problem. And an independent engineer had concluded that the faults had existed before they bought the car.
Mr and Mrs B told us the reason they’d clocked up so many miles was because the garage was a 100-mile round trip. We didn’t think – as the finance provider had argued – that the high mileage meant the car hadn’t been faulty when it was sold. On the other hand, it did suggest that Mr and Mrs B had had some benefit from the car, despite its faults.
We explained to Mr and Mrs B that – because they’d still been able to use the car – it was fair for the finance provider to keep the money they’d already paid.
But given everything we’d seen, we agreed that the car hadn’t been fit for purpose when it was sold. So we told the finance provider that Mr and Mrs B should be allowed to return it – and to cancel their finance agreement.
