Not upheld: PCP / HP mis-selling complaint against BMW Financial Services (GB) Limited

Decision detail

Summary

Mrs E complained that BMWFS wrongly terminated her hire purchase agreement and threatened repossession. She had entered into a 37-month hire purchase agreement in November 2023 with monthly payments of £405. From December 2024 to June 2025, her direct debit payments were repeatedly rejected by her bank, and although she made manual payments, they did not clear the arrears. BMWFS issued a default notice on 12 March 2025 requiring the £770.12 arrears to be cleared by 1 April 2025, and terminated the agreement on 20 June 2025 when Mrs E failed to do so. The ombudsman found that BMWFS had acted fairly by providing reasonable opportunity to repay and properly exercising its contractual right to terminate following non-payment, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Mrs E had agreed to make monthly payments under the hire purchase agreement and failed to do so, allowing arrears to accumulate. Although Mrs E did not intentionally miss payments, she had a contractual obligation to make them. BMWFS provided a reasonable opportunity and time to repay the arrears by issuing a default notice on 12 March 2025 requiring clearance by 1 April 2025. Mrs E did not meet this deadline, and the agreement was properly terminated on 20 June 2025 in accordance with its terms. The hire purchase agreement explicitly permitted BMWFS to end it and seek possession if payments were missed. Mrs E's claim that she contacted BMWFS to make payment is not supported by BMWFS records until after termination had occurred. The ombudsman concluded that BMWFS treated Mrs E fairly in accordance with the Consumer Credit Act 1974 and the terms of the agreement.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website