Upheld: irresponsible lending / goods not of satisfactory quality / failure to investigate quality concerns complaint against Scott Motor Finance Ltd

Decision detail

Summary

Miss B purchased a used car via hire purchase with SMF in June 2025. Within six days, she reported damage to the bonnet and front bumper, suggesting previous accident damage, and requested to reject the car. SMF referred her back to the dealership, which made repairs. After the repairs failed (as evidenced by significant bonnet misalignment in later photos), Miss B continued to request rejection but was refused. The agreement was eventually terminated and the car repossessed and sold at auction. The ombudsman upheld the complaint, finding SMF failed to properly investigate the quality concerns and should have accepted the rejection request. SMF must refund the deposit and all payments, pay interest and £300 compensation, and remove adverse credit information.

The Ombudsman's reasoning

The ombudsman found that SMF, as the supplier under the hire purchase agreement, had a responsibility under the Consumer Rights Act 2015 to investigate whether the faults Miss B reported rendered the car unsatisfactory. The bonnet misalignment shown in the collection photos was more than cosmetic and had potential safety implications. Given the car's age and mileage, a reasonable person would not find such a defect acceptable. SMF's referral back to the credit broker and dealership was insufficient; they should have arranged an independent inspection. Additionally, even if the short-term rejection right did not apply, the failed repair attempt by the dealership meant Miss B could reject the car under the CRA's repair provision. The ombudsman rejected SMF's arguments about buyer's remorse and the lack of evidence, finding that SMF bore the burden of demonstrating satisfactory quality.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website