Not upheld: misrepresentation and unfair contract handling complaint against Volkswagen Financial Services (UK) Limited trading as Skoda Financial Services

Decision detail

Summary

Miss P complained that a used car acquired via hire purchase with VWFS was misrepresented because she was not informed it had previously been used as a taxi, which she discovered in February 2025 when a third-party buyer reduced their offer from £8,000 to £3,000. She also complained about VWFS's refusal to allow payment plans for the balloon payment and their termination of the agreement. The ombudsman found no misrepresentation occurred, as the dealership's HPI check did not reveal the taxi use and there was no evidence VWFS or the dealership knew of it at the time of sale. Even if they had known, the ombudsman concluded the information would likely not have influenced Miss P's decision to purchase given the car's low mileage and brief taxi use. The ombudsman also found VWFS properly terminated the agreement and had offered Miss P a 90-day refinancing option which she did not pursue.

The Ombudsman's reasoning

The ombudsman found no false statement of fact was made regarding the car's prior use as a taxi. While considering whether omission of this information constituted misrepresentation, the ombudsman noted that the HPI check undertaken by the dealership did not reveal this information, and finance companies are under no obligation to complete specific checks. The ombudsman concluded that even if VWFS or the dealership had known and disclosed this information, Miss P would more likely than not have proceeded with the purchase, as the car's low mileage (15,400 miles for its age) and brief taxi use (8 months) would likely have had minimal impact on its value. The ombudsman rejected the reliability of the third-party quote as evidence of actual value loss. Regarding the balloon payment, the ombudsman found VWFS acted properly in terminating the agreement when payment was not made, and that Miss P had been offered a 90-day refinancing option which she did not pursue.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website