Not upheld: restricted finance options / unfair commercial practice complaint against Lookers Motor Group Limited

Decision detail

Summary

Mr S complained that Lookers Motor Group Limited unfairly restricted his finance options when purchasing a vehicle by refusing to invoice his preferred external lender at 8% APR and only offering finance from their approved panel at 10% APR or higher. Lookers defended their commercial decision to only work with their panel of lenders and offered Mr S alternative options including cash payment or personal loans. The FOS investigator and ombudsman both rejected the complaint, finding that using a panel of lenders is standard credit broker practice and that Lookers' commercial decisions fall outside the FOS's jurisdiction. The ombudsman noted that Mr S retained choice and was not obligated to accept unfavorable terms, and that regulatory concerns about the policy should be directed to the FCA.

The Ombudsman's reasoning

The ombudsman determined that the FOS cannot interfere with a firm's commercial decisions, which is the FCA's role. Using a panel of lenders is standard credit broker practice. While Mr S felt the policy was discriminatory and unfair, the ombudsman found it was not unfair for Lookers to restrict finance options to their panel, as customers retained alternative options (cash, personal loan, or panel lenders). The ombudsman noted that Lookers fairly communicated about their use of a panel and that Mr S was not obligated to accept finance terms he disliked.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website