Not upheld: loss of consumer rights following agreement termination; adequacy of disclosure regarding statutory protections complaint against Blue Motor Finance Limited

Decision detail

Summary

Mr B complained that BMF unfairly terminated his hire purchase agreement and refused to allow him to return the car under the voluntary termination provisions of the Consumer Credit Act 1974. Although Mr B had paid more than half the total amount due by April 2025, BMF argued that his termination rights were lost when the agreement was terminated in December 2023 and replaced with a post-termination concession. The ombudsman found that BMF was entitled to terminate the agreement due to missed payments and that the post-termination concession was a separate arrangement that did not preserve the original agreement's protections. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that once BMF was legally entitled to terminate the agreement due to missed payments, it was within its commercial discretion to do so. The termination letter, while not expressly stating that sections 99 and 100 rights were lost, clearly indicated that the original agreement had ended and was not being reinstated. The post-termination concession was a new and separate arrangement, not a continuation of the original agreement. Therefore, Mr B's statutory rights under the Consumer Credit Act did not survive the termination, and he could not exercise voluntary termination rights after the agreement had ended.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website