Not upheld: termination of conditional sale agreement and fairness of default reporting complaint against Close Brothers Limited (trading as Close Brothers Motor Finance)

Decision detail

Summary

Mr B purchased a vehicle via conditional sale agreement in April 2025 for approximately £28,000. The vehicle was seized by Police three times within six months due to insurance and unauthorized driver issues, with the final seizure occurring in September 2025 after an uninsured person drove the vehicle. Close Brothers terminated the agreement and reported a default, which Mr B disputed as unfair and disproportionate despite accepting the termination was contractually valid. The ombudsman found Close Brothers was entitled to terminate the agreement and report the default as factual information, and that the £200 offered for poor customer service was fair compensation.

The Ombudsman's reasoning

The ombudsman found that the vehicle seizures constituted a clear breach of the credit agreement's terms and conditions, which explicitly allowed Close Brothers to terminate the agreement if the vehicle was seized for any reason. Mr B remained contractually responsible for ensuring the vehicle was only driven by insured individuals with his permission, regardless of whether he was present. Close Brothers was entitled to report accurate information (the default and termination) to credit reference agencies as this was factual. The poor customer service was acknowledged but the £200 offered was deemed proportionate compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website