Not upheld: misrepresentation - non-disclosure of vehicle's previous use as taxi complaint against Black Horse Limited

Decision detail

Summary

Mrs S complained that a used car supplied to her under a hire purchase agreement with Black Horse had been misrepresented because the dealership failed to disclose it had previously been used as a taxi. She discovered this when seeking to part exchange the car and received a significantly reduced valuation. The ombudsman found no misrepresentation because the dealership made no false statement of fact and had no evidence of knowing about the taxi use based on the checks it carried out. Although a different type of check by a third-party dealer revealed the previous use, the dealership was not required to perform that specific check. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the test for misrepresentation under common law, requiring both a false statement of fact and inducement. No false statement was made as Mrs S did not allege the dealership specifically stated the car was not used as a taxi. Regarding non-disclosure, the dealership's checks did not reveal the taxi use, so it could not be said to have unreasonably failed to disclose information it was not aware of. The ombudsman noted that different checks revealed different information, but the dealership was not required to carry out the specific check that E performed. Additionally, Mrs S obtained only one resale offer and E did not explicitly state that taxi use was the reason for the valuation reduction, so the ombudsman was not persuaded the previous use significantly affected resale value.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website