Not upheld: refinancing refusal and excess mileage charges; service complaint complaint against Stellantis Financial Services UK Limited

Decision detail

Summary

Miss R complained that Stellantis unreasonably refused to refinance a balloon payment on her car finance agreement and applied excess mileage charges, claiming she had relied on dealer advice that she could refinance instead of increasing her mileage allowance. The ombudsman found that Stellantis was not responsible for the dealer's advice given after the agreement commenced, as it did not form part of antecedent negotiations under the Consumer Credit Act 1974. The agreement contained no contractual right to refinance, and Stellantis was entitled to decline refinancing due to missed or late payments and to apply excess mileage charges in accordance with the agreement terms. The complaint was not upheld, and the £200 compensation previously offered for service issues was deemed fair.

The Ombudsman's reasoning

The ombudsman applied Section 56 of the Consumer Credit Act 1974, which holds finance providers responsible for supplier statements only if they form part of antecedent negotiations before the agreement is made. Since the discussions about refinancing occurred months after the agreement commenced and contractual terms were already agreed, they did not constitute antecedent negotiations. Therefore, Stellantis was not responsible for the dealer's advice. Additionally, the agreement contained no contractual right to refinance the balloon payment, and Stellantis was entitled to decline refinancing based on internal criteria when missed or late payments had occurred. The excess mileage charges were properly applied in accordance with the agreement's clear terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website