Upheld: Travel / life insurance claim disputes complaint against Volkswagen Financial Services (UK) Limited trading as Audi Financial Services

Decision detail

Summary

Mr M acquired a used car through a hire purchase agreement with VWFS after being assured by the dealer that a '222' promotional package (two MOTs, two services, two years warranty) was included. When the car required repairs in June 2025, Mr M discovered the package was not in place because the car was ineligible due to its age. Although the dealer subsequently provided remedial measures including a courtesy car, repair coverage, and warranty extension, Mr M was without his car for a month and experienced significant distress and inconvenience, particularly given his disability and family circumstances. The ombudsman upheld the complaint, finding VWFS liable under Section 56 of the Consumer Credit Act 1974 for the dealer's misrepresentation, and ordered compensation of £500 in addition to a one month's rental refund.

The Ombudsman's reasoning

The ombudsman found that Mr M was told a false statement about the 222 package being in place, which induced him into the HPA. Under Section 56 of the CCA, VWFS is liable for what the dealer said before the agreement was entered. Although the dealer subsequently took remedial action (providing courtesy car, covering repairs, extending warranty) which put Mr M in the position he would have been in had the package been applied, compensation was warranted for the distress and inconvenience caused during the period without the car, particularly given Mr M's disability and family circumstances. The £500 compensation was considered fair and reasonable, in addition to the one month's rental refund.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website