Upheld: Other regulated complaint complaint against Hippo Vehicle Solutions Limited
Financial Ombudsman decision DRN-3661647 of 2023-01-06T00:00:00+00:00. Other regulated complaint complaint against Hippo Vehicle Solutions Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-3661647 |
|---|---|
| Decision date | 2023-01-06T00:00:00+00:00 |
| Firm | Hippo Vehicle Solutions Limited |
| Product | Motor finance (PCP / HP) |
| Claim type | Other regulated complaint |
| Outcome | Upheld |
| Remedy | Hippo Vehicle Solutions Limited must: (1) refund £295 to Mr F as the remainder of the payment received less £5; (2) pay 8% per annum simple interest on the refunded amount from the date of payment until the date of settlement; (3) pay £100 to Mr F for distress and inconvenience caused. |
Summary
Mr F complained about a £300 cancellation fee charged by Hippo Vehicle Solutions Limited when he cancelled a conditional sale agreement for vehicle finance six days after entering into it, before taking ownership of the car. Hippo, acting as a credit broker, had charged the fee under their terms of business, but the ombudsman found this breached section 155 of the Consumer Credit Act 1974, which limits broker fees to £5 when an agreement is cancelled within the cooling-off period. The ombudsman upheld the complaint and ordered Hippo to refund £295 plus 8% annual interest and pay £100 compensation for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that section 155 of the CCA applies to broker fees when an agreement is cancelled within the cooling-off period and is treated as never having been entered into. The reason for cancellation is immaterial under CONC 6.8.3(2). Since Mr F cancelled within six days and within the statutory cooling-off period, the agreement is treated as never having been entered into, and Hippo can only retain £5 of the fee. The remaining £295 must be refunded with 8% annual interest. An award of £100 for distress and inconvenience was appropriate to reflect the frustration and inconvenience caused by the complaint process.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Hippo Vehicle Solutions Limited, all decisions | 14 | 11% |
| Other regulated complaint, all decisions | 19,202 | 17% |
| Motor finance (PCP / HP), all decisions | 19,456 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website