Partially upheld: misleading communication regarding liability reduction following voluntary termination and vehicle sale complaint against Toyota Financial Services (UK) PLC trading as Redline Finance

Decision detail

Summary

Ms D complained that Toyota Financial Services misled her into believing her outstanding liability of £8,738.77 under a hire purchase agreement would reduce when her car was sold following Voluntary Termination. Ms D repeatedly sought clarification on this point before proceeding with the termination. After the car was sold at auction with insufficient proceeds, the liability remained unchanged. Toyota increased its compensation offer to £75, acknowledging communication could have been clearer. The ombudsman upheld the complaint in part, finding Toyota's communication was unclear and capable of misleading, but that the firm was entitled to hold Ms D liable under the agreement terms and there was no evidence of a guarantee or waiver. The £75 compensation was upheld as fair.

The Ombudsman's reasoning

The ombudsman found that while Toyota acted within its contractual rights in holding Ms D liable for half the total amount payable under the hire purchase agreement, the firm's communication about the effect of the vehicle sale on the outstanding balance was unclear and capable of misleading. Ms D repeatedly sought clarification and Toyota failed to clearly explain that any reduction was not guaranteed. However, there was insufficient evidence that Toyota agreed to waive the liability or guaranteed the balance would reduce, so ordering removal of the balance would be unfair. The £75 compensation fairly reflects the impact of the unclear communication.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website