Partially upheld: breach of Direct Debit Guarantee notice requirements complaint against LEX AUTOLEASE LIMITED

Decision detail

Summary

Mr T complained that Lex Autolease charged him £234 for road fund licence following legislative changes to Vehicle Excise Duty and collected it by direct debit without sufficient notice. The ombudsman found the underlying charge was valid under the contract terms, which allowed for VED increases from legislative changes. However, Lex failed to demonstrate compliance with the Direct Debit Guarantee requirement to provide at least 10 working days' advance notice of the amount and collection date. The ombudsman upheld the complaint in part, ordering £75 compensation for distress and inconvenience while declining to refund the properly due charge.

The Ombudsman's reasoning

The ombudsman found that while the £234 charge was validly applied under the contract terms allowing for VED increases from legislative changes, Lex failed to demonstrate compliance with the Direct Debit Guarantee requirements. The guarantee requires at least 10 working days' advance notice of the amount and collection date. Although Lex claimed notification was issued, it could not provide sufficient evidence that this was sent to or received by Mr T within the required timeframe. This constituted a service failing, though not grounds for refunding the underlying charge which was properly due.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website