Not upheld: Consumer Duty compliance - price and value outcome complaint against BMW Financial Services (GB) Limited, trading as Mini Financial Services

Decision detail

Summary

Mr J complained that Mini Financial Services did not comply with Consumer Duty rules when providing a hire purchase agreement for a car at 8.5% APR in December 2024. He was dissatisfied that the firm advertised lower rates (7.9% and 4.9%) shortly after he signed the agreement. The ombudsman found that the 8.5% rate had a reasonable relationship to the benefit provided, was not a market outlier, and that subsequent rate reductions were normal commercial practice. The ombudsman rejected Mr J's complaint and declined to reimburse him for the £2,537.63 loss he incurred by selling the car back to the dealer.

The Ombudsman's reasoning

The ombudsman applied the Consumer Duty requirement that there must be a reasonable relationship between the price paid and the overall benefit received. The 8.5% interest rate was found to have a reasonable relationship to the benefit provided, and was not at a level making it a market outlier. The ombudsman found it normal business practice for firms to update interest rates offered to consumers, and that subsequent rate reductions did not render the original rate unfair. Mr J had agreed to the contractual terms and could have sought alternative finance from other lenders. The decision to sell the car at a loss was Mr J's own choice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website