Not upheld: lack of transparency regarding credit agreement structure and application of deposit complaint against BMW FINANCIAL SERVICES (GB) LIMITED trading as ALPHERA Financial Services

Decision detail

Summary

Mrs W complained that she did not understand she was entering into two separate credit agreements with BMWFS—a £5,000 fixed sum loan and a £44,520 hire purchase agreement—and that the application of her £5,223 deposit was not clearly explained. She also claimed the process was rushed and that she had been told the agreement was a PCP rather than hire purchase. The ombudsman found that Mrs W would have understood the two separate agreements based on the distinct documents she signed on different dates, and that the vehicle purchase and invoice documents clearly showed how her funds were applied to settle negative equity from her trade-in. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mrs W would have been aware she was entering into two separate agreements because she signed two distinctly different documents on separate occasions with clear titles and different amounts. The vehicle purchase and invoice documents provided clear information about the part exchange value, outstanding finance, and amounts due. The one-week gap between signing the agreements provided Mrs W with time to review and ask questions, and her failure to question anything until much later suggests understanding. The ombudsman rejected concerns about the underwriting process and noted that even if the agreement was referred to as a PCP rather than hire purchase, this would not affect the substance of her understanding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website