Not upheld: termination of agreement following non-payment; incorrect advice regarding payment terms complaint against Volkswagen Financial Services (UK) Limited trading as Audi Finance

Decision detail

Summary

Miss F complained about the termination of her hire purchase agreement with VWFS for a used car. She claimed she was incorrectly advised that she could continue making monthly repayments after the final balloon payment of £11,471.25 became due, and was unaware payments had stopped. VWFS acknowledged the incorrect advice and offered £150 compensation but did not uphold the termination complaint. The ombudsman found that while the initial advice was wrong, VWFS acted fairly in terminating the agreement by providing proper notice under the Consumer Credit Act 1974, issuing a default notice in December 2024, and making approximately eight contact attempts between September 2024 and March 2025. The ombudsman concluded Miss F had sufficient opportunity to respond to the arrears correspondence and arrange refinancing, making the termination justified.

The Ombudsman's reasoning

The ombudsman acknowledged that VWFS provided incorrect information but found the firm acted fairly in terminating the agreement. The ombudsman applied Consumer Credit Act 1974 requirements, which mandate notice before termination. The ombudsman found Miss F received sufficient notice through October and November 2024 correspondence about arrears, a December 2024 default notice, and approximately eight contact attempts. The ombudsman concluded that even if Miss F was awaiting a refinancing outcome, she should have responded to the termination correspondence. The £150 compensation offered by VWFS for the initial mistake was deemed a fair reflection of the error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website