Not upheld: voluntary termination liability and payment obligations complaint against Close Brothers Limited trading as Close Brothers Motor Finance

Decision detail

Summary

Mr E complained that Close Brothers was unfairly requesting payment of an instalment due on 5 October 2025 following his voluntary termination of a conditional sale agreement on 2 October 2025. Mr E argued that under section 100(2) of the Consumer Credit Act 1974, he was only liable for sums that were due and unpaid at the point of termination, and that the October instalment was not contractually due when he terminated. The ombudsman found that the instalment more likely than not related to the period from 5 September to 5 October 2025 (before termination) rather than after, based on evidence of a payment date change in 2022 and Close Brothers' consistent explanations. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities standard and found that the instalment due on 5 October 2025 more likely than not related to a period before voluntary termination (5 September to 5 October 2025) rather than after it. The evidence of the payment date change in 2022, the absence of collections during October 2022, and Close Brothers' consistent internal explanations supported this interpretation. The fact that Mr E remained in possession of the car until November 2025 further supported the plausibility of Close Brothers' position. While the ombudsman acknowledged Mr E's argument under section 100(2) of the Consumer Credit Act 1974, it found that in these particular circumstances, Close Brothers' explanation was persuasive.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website