Upheld: mis-selling / misleading information about credit agreement type and voluntary termination rights complaint against Volvo Car Financial Services UK Limited
Financial Ombudsman decision DRN-6224567 of 2026-04-29T00:00:00+00:00. mis-selling / misleading information about credit agreement type and voluntary termination rights complaint against Volvo Car Financial Services UK Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6224567 |
|---|---|
| Decision date | 2026-04-29T00:00:00+00:00 |
| Firm | Volvo Car Financial Services UK Limited |
| Product | motor finance (personal contract plan personal loan) |
| Claim type | mis-selling / misleading information about credit agreement type and voluntary termination rights |
| Outcome | Upheld |
| Remedy | VCFS must: (1) recover the car from Mrs M without passing recovery costs to her; (2) cancel the credit agreement as of 7 October 2025 and treat it as if voluntarily terminated under sections 99-100 of the Consumer Credit Act 1974; (3) refund monthly repayments made after October 2025 (£547.15 per month) plus 8% simple interest per annum; (4) refund servicing, MOT and tyre replacement costs (£686.12 + £164 = £850.12) plus interest; (5) refund road tax and insurance costs totalling £559.74 (£183.94 for November-December 2025 and £375.80 for January-May 2026) plus interest; (6) pay £200 for distress and inconvenience. Interest calculated at 8% simple per year from date of each payment until settlement. If not settled within 28 days of Mrs M's acceptance, interest also applies to the £200 compensation. |
Summary
Mrs M complained that she was misled when entering into a motor finance agreement with VCFS in June 2022. She believed she was taking out a personal contract plan with voluntary termination rights (as she had done previously), but discovered in April 2025 when enquiring about early termination that she had actually been provided with a personal contract plan personal loan (fixed sum loan) without voluntary termination rights. Although the credit agreement documentation clearly stated the product type and absence of voluntary termination, the Finance Suitability Questionnaire recorded Mrs M as having declined the recommended personal contract plan and chosen the personal loan version without any documented explanation for this choice. The ombudsman found Mrs M credible in her testimony that she did not understand she was taking out a different product and had not had the differences adequately explained to her. The ombudsman upheld the complaint and directed VCFS to treat the agreement as if it had been voluntarily terminated on 7 October 2025 (when Mrs M acquired a replacement vehicle), refund all subsequent monthly payments plus interest, refund associated servicing, MOT, tyre, insurance and road tax costs incurred after that date, and pay £200 compensation for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found Mrs M credible and consistent in her recollection that she believed she was taking out a personal contract plan with voluntary termination rights, as she had done previously. While the credit agreement documentation clearly stated it was a fixed sum loan without voluntary termination, the Finance Suitability Questionnaire recorded Mrs M as having 'declined' the recommended personal contract plan and 'chosen' the personal loan version without any explanation recorded for this choice. Given that Mrs M had no clear reason to decline the recommended option, the minimal differences between the two products (except for voluntary termination), and the absence of any documented discussion explaining the choice, the ombudsman concluded it was plausible that Mrs M was not made sufficiently aware of the type of agreement she was entering into or its lack of voluntary termination rights. The ombudsman applied the principle of putting Mrs M back into the position she would have been in had she been correctly informed, concluding she would have taken the recommended personal contract plan instead.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Volvo Car Financial Services UK Limited, all decisions | 58 | 40% |
Source
Read the original decision on the Financial Ombudsman Service website