Not upheld: mis-selling - misrepresentation regarding interest rates complaint against MotoNovo Finance Limited

Decision detail

Summary

Mr R complained that MotoNovo mis-sold him a car finance agreement by failing to clearly explain that different interest rates (8.1% and 5.13%) applied to different parts of the loan. Mr R believed the lower rate applied to the entire loan based on dealer communications. Although the ombudsman acknowledged confusion and the dealer's lack of clarity, it found no actionable misrepresentation because Mr R knew the total payments required and his primary motivation was purchasing the car at that known cost. The accurate rates were available in the signed agreement, and Mr R had opportunity to seek clarification before signing.

The Ombudsman's reasoning

The ombudsman applied the legal test for actionable misrepresentation under Section 56 of the Consumer Credit Act, requiring that a false statement materially induced the consumer to enter the contract. While acknowledging confusion over interest rates, the ombudsman found that Mr R knew the essential element determining acceptance—the total monthly and overall payments. The ombudsman concluded the confusion over rates was regrettable but did not constitute actionable misrepresentation, as Mr R's primary motivation was purchasing the car at a known cost, and accurate information was available in the signed agreement with opportunity for clarification.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website