Upheld: Other regulated complaint complaint against BLUE MOTOR FINANCE LIMITED
Financial Ombudsman decision DRN-6388849 of 2026-07-01T00:00:00+00:00. Other regulated complaint complaint against BLUE MOTOR FINANCE LIMITED. Outcome: Upheld.
Decision detail
| Reference | DRN-6388849 |
|---|---|
| Decision date | 2026-07-01T00:00:00+00:00 |
| Firm | BLUE MOTOR FINANCE LIMITED |
| Product | Motor finance (PCP / HP) |
| Claim type | Other regulated complaint |
| Outcome | Upheld |
| Remedy | BMF must: (1) end the agreement with no further liability for Mr E after collection; (2) collect the car at no cost to Mr E; (3) remove adverse credit file entries; (4) refund the deposit paid with 8% simple yearly interest from date of payment to date of refund; (5) pay £200 compensation for distress and inconvenience caused. |
Summary
Mr E complained that a car acquired through Blue Motor Finance Limited via hire purchase in August 2024 was misrepresented because the supplying dealership failed to disclose that the car had previously been stolen/recovered and carried a Category X marker. The car, purchased for £15,970 with a £5,000 deposit, was nearly ten years old with over 109,000 miles. Although the car was roadworthy and passed MOTs, Mr E now faces difficulties insuring and selling it due to its Category X status. The ombudsman upheld the complaint, finding an innocent misrepresentation by omission of a material fact that induced Mr E to enter the finance agreement. BMF was held liable under section 56 of the Consumer Credit Act 1974 for the dealership's representations. The ombudsman ordered BMF to accept rejection of the car, refund the deposit with interest, and pay £200 compensation, while allowing BMF to retain monthly rental payments as fair usage compensation.
The Ombudsman's reasoning
The ombudsman applied section 56 of the Consumer Credit Act 1974, making BMF liable for representations made by the supplying dealership during antecedent negotiations. Although the car was roadworthy and fit for purpose when supplied (evidenced by passing MOTs), the omission of the Category X stolen/recovered status from the advertisement constituted an innocent misrepresentation by omission of a material fact. The ombudsman found Mr E's testimony persuasive that he would not have financed the car had he known its history, satisfying both elements of misrepresentation: a false statement of fact by omission and that this induced him to enter the finance agreement. The ombudsman rejected BMF's argument that the car was satisfactory quality, as the complaint was about misrepresentation rather than quality. Fair usage was accounted for by allowing BMF to retain monthly rental payments, but the deposit was ordered to be refunded.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| BLUE MOTOR FINANCE LIMITED, all decisions | 453 | 52% |
| Other regulated complaint, all decisions | 18,992 | 19% |
| Motor finance (PCP / HP), all decisions | 19,529 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website