Not upheld: Agreement termination and default reporting following police seizure of vehicle complaint against MotoNovo Finance Limited

Decision detail

Summary

Mr O complained that MotoNovo Finance Limited unfairly terminated his Hire Purchase Agreement and reported a default to Credit Reference Agencies after the police seized his car in October 2025. Mr O argued the default was unfair as it did not reflect non-payment and he was not given meaningful opportunity to resolve the issue. The ombudsman found MotoNovo acted fairly because the agreement terms explicitly permitted termination upon police seizure, the default accurately reflected the contractual breach, and MotoNovo reasonably relied on police information. The ombudsman upheld only MotoNovo's offer of £75 compensation for an incorrectly reported missed payment marker and rejected the request to remove the default marker.

The Ombudsman's reasoning

The ombudsman found that MotoNovo acted fairly because: (1) the Hire Purchase Agreement clearly stated that police seizure of the car constituted a breach allowing termination; (2) MotoNovo reasonably relied on police information regarding the seizure rather than Mr O's insurance evidence, as determining lawfulness of seizure is not the ombudsman's role; (3) there were multiple breaches of the agreement beyond failure to notify, so timing of notification was not determinative; (4) the Default Notice was properly issued under Consumer Credit Act 1974 Section 87; (5) ICO guidance confirms defaults can be recorded for situations beyond non-payment, including when the relationship has broken down; (6) the time given to remedy the breach was in line with guidance; (7) the default accurately reflected what occurred.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website