Partially upheld: Mortgage administration / arrears handling complaint against Moneybarn Limited

Decision detail

Summary

Mr H entered a conditional sale agreement with Moneybarn in August 2022 to finance a car. He stopped making payments in September 2023 and the agreement was terminated in April 2024 after default. Mr H complained that he was treated unfairly and should have received more assistance with his arrears, and that he attempted to add a third party to resume payments but was unable to due to poor customer service. The ombudsman found Moneybarn acted fairly in defaulting and terminating the agreement given Mr H's inability to pay and breach of contract terms, but upheld the complaint in part because Moneybarn failed to properly respond to two letters from Mr H about his situation, awarding £150 compensation for this service failure.

The Ombudsman's reasoning

The ombudsman found that Moneybarn acted fairly in defaulting and terminating the agreement because Mr H had no ability or reasonable prospect of paying the finance, and was in breach of contract by failing to maintain the vehicle. However, Moneybarn failed to properly respond to two letters from Mr H about his personal situation and intention to add a third party, causing distress and inconvenience. While better communication would not have changed the outcome, compensation was warranted for this service failure.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website