Not upheld: termination and default of hire purchase agreement; alleged unfair enforcement complaint against RCI Financial Services Limited trading as Nissan Finance

Decision detail

Summary

Ms O complained that RCI unfairly terminated and defaulted her hire purchase agreement after she was unable to pay the final payment of £11,477. Ms O lost her job in May 2025 due to health deterioration and was reliant on benefits and family financial support. RCI offered a refinance option of £256.43 monthly over 60 months, which Ms O could not afford. The ombudsman found RCI acted reasonably by offering options for four months before issuing a default notice, as the refinance option was not viable given the car's age and Ms O's financial circumstances. The ombudsman also found RCI complied with Consumer Credit Act requirements regarding repossession, as Ms O had not paid one-third of the total amount owing. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that RCI acted reasonably by offering refinancing options and allowing Ms O four months to respond before defaulting. The refinance option offered (60 months on a car already over 6 years old) would have extended the car's financing beyond its reasonable lifespan and was not viable given Ms O's reliance on family financial support. The final payment of £11,477 represented 62 months of arrears, making default appropriate between 3-6 months of arrears. RCI did not breach Consumer Credit Act requirements as Ms O had not paid one-third of the total amount owing (£7,611 vs £8,247 required), so repossession without a court order was lawful. The default amount registered (£11,477) was correct, not the £20,613 Ms O claimed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website