Partially upheld: unfair termination of agreement and disproportionate adverse credit reporting complaint against BMW FINANCIAL SERVICES (GB) LIMITED (trading as Alphera Financial Services)

Decision detail

Summary

Mr T complained that BMWFS unfairly terminated his car finance agreement and recorded a default on his credit file. The vehicle was registered in Mr T's daughter's name and she was the primary user, breaching the agreement terms. BMWFS issued a default notice in October 2025 and terminated the agreement when the breach was not remedied. While the ombudsman found BMWFS was entitled to terminate the agreement, the recording of a default was deemed unfair and disproportionate because Mr T maintained all monthly payments, had no arrears, repaid the agreement in full, and the arrangement had existed for years without prior concerns. The complaint was upheld in part, requiring BMWFS to remove the default from Mr T's credit file.

The Ombudsman's reasoning

While BMWFS was entitled to conclude there was a breach of agreement terms (vehicle registered in daughter's name, daughter as primary user) and was entitled to terminate the agreement, the recording of a default was unfair and disproportionate. The breach did not involve missed repayments, arrears, or evidence of inability to meet obligations. Monthly payments were maintained throughout and the agreement was repaid in full. The arrangement had existed for years in the same form without concerns being raised during refinancing. The steps taken before recording the default (one written notice and one unsuccessful telephone attempt) were insufficient to justify the most serious form of adverse credit reporting for six years.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website