Not upheld: early repayment restriction and communication clarity complaint against BMW FINANCIAL SERVICES (GB) LIMITED

Decision detail

Summary

Mr F complained that BMWFS prevented him from making a second partial early repayment within 28 days of his first £5,000 payment, contrary to his understanding of the hire purchase agreement which stated he could repay at any time. BMWFS explained the 28-day period was necessary for administrative processing, interest rebate calculations, and system updates. The ombudsman found the processing period reasonable and that while BMWFS's communication could have been clearer, there was insufficient evidence the restriction was unfair or that it directly caused the additional interest Mr F claimed. The complaint was not upheld, and BMWFS's £100 offer was deemed adequate compensation.

The Ombudsman's reasoning

The ombudsman accepted that while the right to make early repayments does not necessarily mean BMWFS must process multiple partial repayments immediately, administrative delays for processing, interest rebate calculations, and system updates are reasonable. Although the 28-day restriction was not expressly stated in the agreement and communication was unclear, there was insufficient evidence that the processing period itself was unreasonable or that BMWFS acted unfairly. The ombudsman also found insufficient evidence that BMWFS's actions directly caused the claimed additional interest loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website