Upheld: breach of implied term of satisfactory quality under Consumer Rights Act 2015; failed repairs; right to reject goods complaint against RCI Financial Services Limited
Financial Ombudsman decision DRN-6417684 of 2026-06-09T00:00:00+00:00. breach of implied term of satisfactory quality under Consumer Rights Act 2015; failed repairs; right to reject goods complaint against RCI Financial Services Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6417684 |
|---|---|
| Decision date | 2026-06-09T00:00:00+00:00 |
| Firm | RCI Financial Services Limited |
| Product | Motor finance (PCP / HP) |
| Claim type | breach of implied term of satisfactory quality under Consumer Rights Act 2015; failed repairs; right to reject goods |
| Outcome | Upheld |
| Remedy | RCI Financial Services Limited must: (1) Collect the car at no charge to Mr S and end the agreement without adverse credit reporting or liability for ongoing monthly rentals post-collection; (2) Refund the deposit (£300) and part exchange value (£691.75); (3) Refund all rentals from 1-7 July 2025; (4) Refund 15% of all rentals from 8 July 2025 to date of settlement; (5) Refund £80 for tyres and pro-rata refund for MOT and service (on proof of payment after 7 July 2025); (6) Pay 8% yearly simple interest on all refunds from date of payment to date of settlement; (7) Pay £250 compensation for distress and inconvenience. |
Summary
Mr S purchased a new car on hire purchase from RCI in April 2023. In May 2025, approximately 2 years later with 17,000 miles, he noticed a persistent banging noise. The dealer diagnosed and repaired a boot lock rattle on 7 July 2025, but the repair introduced a new problem: boot misalignment preventing proper closure. A second repair attempt on 14 July 2025 also failed to resolve the issue. The ombudsman found this breached the implied term of satisfactory quality under the Consumer Rights Act 2015, as a new car should be reasonably durable. Having had two failed repair attempts, Mr S was entitled to reject the car. RCI was ordered to collect the car, end the agreement, refund the deposit and part exchange value, refund portions of monthly rentals (15% from July 2025 onwards to reflect impaired use), refund expenses for tyres and pro-rata MOT/service costs, pay 8% interest on refunds, and pay £250 compensation for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman applied the Consumer Rights Act 2015, which implies that goods supplied must be of satisfactory quality. For a new car, a reasonable person would expect a higher standard of quality and durability than a second-hand vehicle. While the stone lodged in the dust shield was not an inherent defect, the boot lock mechanism failing at approximately 2 years old and 17,000 miles represents a breach of the implied term of satisfactory quality due to lack of durability. The two attempted repairs were unsuccessful, with the first repair introducing new problems (boot misalignment). Under the CRA, Mr S has a statutory right to reject goods after one failed attempt to repair; having had two failed attempts, rejection is fair. The ombudsman rejected the argument that RCI is not responsible for failed repairs when those repairs are attempts to remedy a breach of contract. Regarding remedy, the ombudsman determined Mr S should pay for use of the car (as mileage usage did not significantly decrease), but allowed a 15% refund of monthly payments from July 2025 onwards to reflect impaired use, plus full refund for the first week of July 2025 when the car was in for repairs without a courtesy car.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| RCI Financial Services Limited, all decisions | 455 | 39% |
| Motor finance (PCP / HP), all decisions | 18,521 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website