Not upheld: Mortgage administration / arrears handling complaint against Mallard Leasing Limited

Decision detail

Summary

Mr A complained about charges and repossession by Mallard Finance following termination of a hire purchase agreement for a used car. Mr A had missed multiple payments, requested a Covid-19 payment deferral in May 2020 (which Mallard granted with interest), and subsequently failed to respond to multiple contact attempts while working abroad. Mallard repossessed the car in July 2020 after issuing a termination notice, and sold it at auction for £1,650, leaving an outstanding balance. The ombudsman found that Mallard acted reasonably throughout: the FCA Covid-19 guidance did not apply as Mr A was already in financial difficulty, Mallard made extensive contact attempts before repossessing, and the auction price was reasonable given the car's condition. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mallard acted reasonably throughout. Regarding the payment deferral, the FCA Covid-19 guidance requiring three months' deferral applied only to customers newly facing difficulties due to the pandemic; Mr A was already in financial difficulty, so month-by-month consideration was reasonable. Regarding repossession, Mallard made extensive contact attempts, had a contractual right to repossess as less than one-third of the total amount had been paid, and had a clear pattern of missed and late payments justifying the decision. The ombudsman noted Mr A only provided evidence of two prior contacts with Mallard and did not respond to multiple contact attempts. Regarding the auction price, the ombudsman found it reasonable given the car's poor condition after 12 months and 11,000+ miles of use, and noted Mr A had not raised quality issues during ownership. The small payments taken via direct debit were lawful as they were less than the amounts previously notified.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website