Upheld: mishandling of rejection of goods for unsatisfactory quality; unfair usage charges; unfair damage charges complaint against Tandem Motor Finance Limited

Decision detail

Summary

Mr J purchased a used car via hire purchase in December 2024 but experienced a clutch failure and transmission fault within the first month. An independent inspection in March 2025 confirmed the faults were pre-existing and the clutch repair had failed. Tandem agreed Mr J could reject the car but charged him 0.25p per mile for usage (£704.75) and later retained his full £1,000 deposit claiming £2,725.44 in damage costs without providing adequate evidence. The ombudsman upheld Mr J's complaint, finding the usage charge unreasonable and the damage charges unsupported by sufficient evidence, ordering full refunds and removal of charges.

The Ombudsman's reasoning

The car was not of satisfactory quality as it had a pre-existing fault that could not be repaired. Under the Consumer Rights Act 2015, Mr J was entitled to reject the car with nothing further to pay. The 0.25p per mile usage charge was unreasonable given the monthly payments already made (£114.33pm), lack of mileage restrictions, and that average usage was less than 1,000 miles per month. The damage charges could not be fairly imposed without clear evidence of the damage and proof it occurred during Mr J's possession. The ombudsman restricted usage costs to payments already made until March 2025 when the car became unusable due to faults.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website