Partially upheld: poor communication during financial difficulty; service failure in explaining payment obligations complaint against Volkswagen Financial Services (UK) Limited trading as Audi Financial Services

Decision detail

Summary

Mr N complained to the FOS about poor service from VWFS when he fell into financial difficulties in June 2025. During an income and expenditure assessment, VWFS told Mr N he needed to pay £400 per month but failed to clearly communicate this was in addition to his contractual £785.89 monthly payment, causing confusion at a vulnerable time. VWFS accepted this was a service failure. The ombudsman upheld the complaint in part, awarding £500 compensation and requiring an apology letter, but rejected Mr N's claims that the error caused the agreement to become unaffordable or prevented him from exiting it, finding that his credit file showed he was already in financial difficulty and would likely have fallen into arrears regardless.

The Ombudsman's reasoning

The ombudsman found that while VWFS showed forbearance by conducting an income and expenditure assessment and applying breathing space periods, they failed to communicate clearly about payment obligations at a time when Mr N was in financial difficulty. This communication failure caused confusion and distress and contributed to immediate difficulties including a failed payment and arrears accumulation. However, the ombudsman found that Mr N's credit file showed he was already experiencing financial difficulty before the error and would likely have fallen into arrears regardless. Therefore, VWFS was not responsible for the wider financial consequences Mr N now faces, which were largely due to market conditions and agreement terms rather than the firm's error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website