Upheld: irresponsible account handling, incorrect arrears reporting, failure to issue statutory notice complaint against MotoNovo Finance Limited
Financial Ombudsman decision DRN-6345663 of 2026-05-14T00:00:00+00:00. irresponsible account handling, incorrect arrears reporting, failure to issue statutory notice complaint against MotoNovo Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6345663 |
|---|---|
| Decision date | 2026-05-14T00:00:00+00:00 |
| Firm | MotoNovo Finance Limited |
| Product | car finance |
| Claim type | irresponsible account handling, incorrect arrears reporting, failure to issue statutory notice |
| Outcome | Upheld |
| Remedy | Remove arrears markers from credit file; refund any interest or charges applied due to incorrect arrears status; ensure account not treated as in arrears during Section 75 and legal action; pay £400 compensation in addition to £75 already paid. |
Summary
Mr W complained about MotoNovo's handling of his account after rejecting a car in 2025, specifically regarding arrears applied without statutory notice and the impact on his credit file. MotoNovo investigated and found the arrears were incorrectly applied whilst the account was subject to a Section 75 dispute and legal claim, and initially paid £75 compensation. The ombudsman upheld the complaint, finding the original compensation insufficient but accepting that the additional £400 offered, combined with credit file correction and refund of charges, fairly addresses the distress and inconvenience caused. Mr W sought £3,500-£4,000 but the ombudsman determined £400 additional compensation was appropriate as it sits within the range for similar cases.
The Ombudsman's reasoning
The ombudsman found that MotoNovo's failure to issue statutory notice of arrears and treat the account as in arrears during a Section 75 dispute caused distress and inconvenience. While the original £75 compensation was insufficient, the additional £400 offered sits within the range of awards for similar situations and appropriately reflects the impact on Mr W's credit file over time. The main redress sought (credit file correction) has been addressed, putting Mr W back in the position he would have been in had the error not occurred.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| MotoNovo Finance Limited, all decisions | 559 | 45% |
Source
Read the original decision on the Financial Ombudsman Service website