Upheld: Goods and services under S75 complaint against Zenauto Limited
Financial Ombudsman decision DRN-5780526 of 2025-08-28T00:00:00+00:00. Goods and services under S75 complaint against Zenauto Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5780526 |
|---|---|
| Decision date | 2025-08-28T00:00:00+00:00 |
| Firm | Zenauto Limited |
| Product | Motor finance (PCP / HP) |
| Claim type | Goods and services under S75 |
| Outcome | Upheld |
| Remedy | Zenauto Limited must: (1) Refund Mrs B a pro-rata portion of the initial rental payment to reflect the unused amount from when the car was returned; (2) Refund 15% of the monthly payments made from the start of the contract until it was ended; (3) Refund the December 2024 payment; (4) Pay 8% simple yearly interest on all refunds calculated from the date of payment to the date of settlement (or earlier if refunds already made); (5) Pay £300 compensation for inconvenience and distress. Zenauto should calculate total compensation and deduct any amounts already paid to Mrs B, then pay the difference. |
Summary
Mrs B complained about a new car acquired through a hire agreement with Zenauto in June 2022, which had persistent faults including juddering, faulty infotainment system, and gearbox issues from the first month of ownership. Although the dealership investigated multiple times, the faults were only confirmed by an independent inspection in November 2024. Zenauto upheld the complaint and offered compensation including a 15% refund of hire payments and £300 for distress, but Mrs B considered this insufficient. The ombudsman upheld the complaint and increased the compensation to include a pro-rata refund of the initial payment, refund of the December 2024 payment, 8% interest on all refunds, and maintained the £300 distress compensation, while upholding the excess mileage charge as contractually valid.
The Ombudsman's reasoning
The ombudsman accepted that the car was not of satisfactory quality as faults were present at the time of supply. While Zenauto's offer of 15% refund of hire payments was considered fair compensation for loss of utility (as the car could still be used for transport despite intermittent faults), the ombudsman found that additional compensation was warranted. The initial payment should be partially refunded on a pro-rata basis reflecting the unused portion of the agreement. The December 2024 payment should be refunded as it was made after the car was recognised as faulty. The £300 distress compensation was maintained as fair, considering the difficulties in diagnosing intermittent faults and that Zenauto attempted repairs. The excess mileage charge was upheld as it was contractually permitted and properly calculated on a pro-rata basis.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Zenauto Limited, all decisions | 6 | 42% |
| Goods and services under S75, all decisions | 19,153 | 37% |
| Motor finance (PCP / HP), all decisions | 19,455 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website