Upheld: PCP / HP mis-selling complaint against Hyundai Capital UK Limited

Decision detail

Summary

Mr B complained that Hyundai Capital UK Limited misrepresented a fixed sum loan agreement he entered in October 2021 to finance a car, as he believed he was entering a standard PCP agreement with voluntary termination rights. When Mr B attempted to voluntarily terminate the agreement in March 2024, Hyundai informed him it was a fixed sum loan without such rights. Upon requesting his agreement documents in May 2025, Hyundai provided a conditional sale agreement containing voluntary termination rights, claiming it was only a pre-contractual document. The ombudsman found on the balance of probabilities that Mr B was provided with documentation showing voluntary termination rights prior to entering the agreement, and the two agreements were structurally similar with only minor differences, suggesting the paperwork was amended without Mr B's knowledge. The ombudsman upheld the complaint, finding the agreement was misdescribed and misrepresented to Mr B, and ordered Hyundai to pay £1,000 compensation for distress and inconvenience, while allowing Hyundai to retain contractual payments for Mr B's use of the car.

The Ombudsman's reasoning

On the balance of probabilities, Mr B was provided with documentation setting out the right to voluntary termination prior to entering the agreement. The conditional sale agreement and fixed sum loan agreement are structured similarly with only minor differences and both contain Mr B's personal details and car information, yet no evidence exists of when or why the paperwork was amended. The fixed sum loan agreement contains features (balloon payment, hand-back options) typical of conditional sale or hire purchase agreements rather than fixed sum loans where ownership transfers immediately. Mr B's testimony was consistent and persuasive that he understood he was entering a conditional sale agreement with voluntary termination rights. Therefore, the agreement was misdescribed and misrepresented to Mr B. Regarding remedy, Mr B had full use of the car and it has been returned, so Hyundai can retain contractual payments. However, it is impossible to quantify the financial loss from not being able to change vehicles when circumstances changed. The significant distress and inconvenience caused by being unable to end the agreement when Mr B believed he could justifies £1,000 compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website