Not upheld: unfair cancellation fee / contract terms complaint against OLTON ALEXANDER LIMITED

Decision detail

Summary

Ms J instructed OAL to pursue a mis-sold motor finance claim against Lender M in December 2025 but cancelled the agreement on 6 January 2026 after realising the finance was in her ex-husband's name. OAL charged a £72 cancellation fee, which Ms J disputed as unfair given the limited work completed and the claim's likely failure. The ombudsman found the fee was properly charged under the Terms of Engagement, which allowed cancellation without charge only within 14 calendar days of signing the Letter of Authority (by 31 December 2025). Since Ms J cancelled outside this period, OAL was entitled to charge a reasonable fee for administrative work completed. The ombudsman rejected Ms J's argument about the claim's likely failure due to insufficient evidence that the finance was not in her name.

The Ombudsman's reasoning

The ombudsman found that OAL properly provided the Terms of Engagement to Ms J, which clearly stated a 14-day cooling off period for cancellation without charge, calculated as calendar days from the date of signing the Letter of Authority. Since Ms J cancelled on 6 January 2026, outside this period, OAL was entitled to charge a cancellation fee. The fee was reasonable and reflective of the administrative work completed (document production, case assessment, pre-administrative work, and three emails). The ombudsman rejected Ms J's argument that the claim would have been unsuccessful because she could not provide definitive evidence that the finance was in her ex-husband's name rather than her own.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website