Not upheld: unfair termination of hire purchase agreement; service failures in communication and arrears notification complaint against Toyota Financial Services (UK) PLC
Financial Ombudsman decision DRN-6266943 of 2026-05-18T00:00:00+00:00. unfair termination of hire purchase agreement; service failures in communication and arrears notification complaint against Toyota Financial Services (UK) PLC. Outcome: Not upheld.
Decision detail
| Reference | DRN-6266943 |
|---|---|
| Decision date | 2026-05-18T00:00:00+00:00 |
| Firm | Toyota Financial Services (UK) PLC |
| Product | hire purchase agreement |
| Claim type | unfair termination of hire purchase agreement; service failures in communication and arrears notification |
| Outcome | Not upheld |
| Remedy | TFS's offered compensation of £100 in total (£50 for arrears letter error and £50 for communication issues) was deemed reasonable and sufficient. Mr S was advised to contact TFS to accept these offers if he wished to do so. |
Summary
Mr S complained about TFS's termination of a hire purchase agreement for a used car after the vehicle was seized by police in October 2025 when driven by a third party without required insurance. Mr S argued the termination was unfair and disproportionate, citing incorrect police information about his driving convictions, his control of the car despite a temporary address change on the logbook, and TFS's failure to offer forbearance. TFS acknowledged service failures in sending an arrears letter and communication, offering £100 compensation, but maintained the termination was justified as the seizure constituted a breach of contract. The ombudsman found the termination was fair and reasonable based on the undisputed facts that the car was driven without insurance and seized, which breached the agreement terms, and did not uphold the complaint.
The Ombudsman's reasoning
The ombudsman found that Mr S breached the hire purchase agreement by allowing a third party to drive the car without required insurance, which resulted in police seizure. The agreement terms explicitly permitted TFS to terminate if goods were seized. Although TFS discussed other concerns with Mr S (including potentially incorrect information about driving convictions), the termination decision was ultimately based on undisputed facts: the car was driven without insurance and was seized. This provided fair grounds for termination regardless of other matters discussed. The service failures regarding arrears notification and communication were acknowledged but did not impact the termination decision. No evidence was presented that Mr S disclosed financial circumstances requiring forbearance under CONC 7.14, and the relationship was not found to be unfair under Section 140A of the Consumer Credit Act.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Toyota Financial Services (UK) PLC, all decisions | 228 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website