Partially upheld: unfair damage charges, unfair default reporting, poor customer service complaint against Startline Motor Finance Company

Decision detail

Summary

Miss D complained about unfair damage charges (£972.26) applied after voluntarily terminating her car finance agreement with Startline, the reporting of a default against her, and poor customer service. The car was collected in March 2023 but Startline was unaware of its location for several weeks due to an administrative error, and it was not inspected until May 2023. Miss D disputed the charges, arguing the damage occurred while the car's location was unknown and was not her responsibility. The ombudsman found that while charges for tyres below legal limit and a broken gear lever were justified, insufficient evidence supported charges for the fog lamp, vent, and doors, reducing the outstanding balance to £279.39. The default was found to be unfairly reported and was removed. The ombudsman awarded £300 compensation for distress and inconvenience, including the impact of the default on Miss D's ability to obtain credit and Startline's failure to respect her written communication request.

The Ombudsman's reasoning

The ombudsman found that while the credit agreement terms required the car to be returned in good condition, Startline failed to produce a collection report documenting the car's condition when collected. Given the car's location was unknown for several weeks, there was insufficient evidence to prove the alleged damage to the fog lamp, vent, and doors existed when Miss D returned the car. However, the inspection report with photographic evidence clearly showed the tyres were below legal limit and the gear lever was broken, which exceeded fair wear and tear under BVRLA guidance. The default was unfairly reported as Miss D had followed the return process correctly. The ombudsman could not establish that the declined credit application was solely caused by the default, so declined to award specific compensation for that loss, but considered it in the overall distress assessment. Startline's failure to respect the written communication request after February 2025 also fell below reasonable customer service standards.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website