Upheld: unauthorized activation of finance agreement and failure to promptly reverse it complaint against CARMONEY LIMITED

Decision detail

Summary

Mr M complained that CarMoney activated a vehicle finance agreement without his authority in August 2025. He had explicitly instructed CarMoney not to release funds until he inspected the car and confirmed he wished to proceed. After viewing the car and deciding not to proceed due to its condition, Mr M discovered the finance had been activated and funds released. The agreement remained on his credit file for several weeks despite his immediate complaint, affecting his ability to obtain alternative finance. The ombudsman upheld the complaint, finding on the balance of probabilities that CarMoney acted unfairly by activating the agreement before Mr M gave final authority, and directed CarMoney to pay £500 compensation for the distress and inconvenience caused.

The Ombudsman's reasoning

On the balance of probabilities, the finance agreement was activated before Mr M gave final authority to proceed. Mr M's account was detailed, internally consistent, and corroborated by his actions in inspecting the car and rejecting it. CarMoney failed to provide a substantive response or business file despite being given the opportunity, so the decision was made on available evidence. The unauthorized activation was unfair and resulted in avoidable consequences including distress, inconvenience, and disruption to Mr M's credit file and alternative financing efforts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website