Not upheld: service complaint - handling of withdrawal from credit agreement and communication failures complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Mr C entered into a PCP agreement with Halifax on 20 November 2025 to finance a car purchase from a dealership. Four days later, he exercised his right to withdraw from the credit agreement within the 14-day cooling off period and requested the funds be returned so the agreement could be unwound. Halifax explained that while withdrawal ended the finance agreement, it did not cancel the separate contract with the dealership and the agreement could only be closed once the dealership returned the funds. Mr C complained that Halifax should have done more to recover the funds, provided incorrect information about his rights, and failed to respond properly to his communications. The ombudsman found that Halifax acted reasonably as it was not a party to the dealership contract and had no authority to unilaterally require return of funds, and that any communication shortcomings did not materially affect the outcome.

The Ombudsman's reasoning

The ombudsman found that withdrawal from a regulated credit agreement ends the finance agreement but does not cancel the separate supply contract. Since Halifax was not a party to the dealership contract, it had no authority to unilaterally require return of funds and acted reasonably in explaining this position. Even if some information provided was unclear or inaccurate, this did not change the legal position or outcome. While communication could have been clearer and more timely, there was no substantive failing causing financial loss, and Halifax was not responsible for the dealership's actions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website