Partially upheld: Goods and services under S75 complaint against BMW FINANCIAL SERVICES (GB) LIMITED trading as ALPHERA Financial Services
Financial Ombudsman decision DRN-6440600 of 2026-06-29T00:00:00+00:00. Goods and services under S75 complaint against BMW FINANCIAL SERVICES (GB) LIMITED trading as ALPHERA Financial Services. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6440600 |
|---|---|
| Decision date | 2026-06-29T00:00:00+00:00 |
| Firm | BMW FINANCIAL SERVICES (GB) LIMITED trading as ALPHERA Financial Services |
| Product | Motor finance (PCP / HP) |
| Claim type | Goods and services under S75 |
| Outcome | Partially upheld |
| Remedy | Alphera must: (1) Reduce the amount Mr B owes to the level it would be if he had voluntarily surrendered the car, deducting net sales proceeds, including any applicable interest rebate and payments made since termination; (2) Remove any adverse credit information recorded after the termination date until the decision date; (3) Pay Mr B £400 compensation for distress and inconvenience. Any compensation may be paid to Mr B's Insolvency Practitioner as they have an interest in the complaint. |
Summary
Mr B purchased a used car under a hire purchase agreement with Alphera in September 2024 and subsequently reported multiple quality concerns. After the dealership's repair attempt, Mr B discovered additional issues including rodent droppings and potentially unsafe wiring. In March 2025, Mr B requested to hand back the car due to financial difficulties and mental health impact. Alphera offered voluntary termination with a remaining liability of £10,757.95, but its complaint handler then incorrectly told Mr B the car had been rejected, leading to months of confusion with continued arrears notices. The ombudsman found insufficient evidence to conclude the car was of unsatisfactory quality but upheld the complaint on the basis that Alphera failed to present the voluntary surrender option, which would have resulted in a lower liability. The ombudsman ordered Alphera to reduce the balance to reflect the voluntary surrender position, remove adverse credit information, and pay £400 compensation.
The Ombudsman's reasoning
The ombudsman found that while Mr B's concerns about the car's safety were genuine, there was insufficient independent expert evidence to conclude the car was of unsatisfactory quality following the dealership's repair. Mr B's own testimony, though credible, was based on recollections rather than diagnostic information and could not be given the same weight as an independent expert inspection. However, the ombudsman found Alphera's handling of the termination process was unfair: it failed to explain the implications of voluntary termination, did not present alternative options such as voluntary surrender, and incorrectly told Mr B the car had been rejected. Given that Mr B requested to hand back the car early in the agreement term (around six months into a 48-month agreement) and had stated he was in financial difficulty, the ombudsman found it more likely than not that Mr B would have chosen voluntary surrender had this option been properly presented. The ombudsman determined that Mr B should be placed in the position he would have been in had voluntary surrender been offered, resulting in a lower outstanding balance.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| BMW FINANCIAL SERVICES (GB) LIMITED trading as ALPHERA Financial Services, all decisions | 41 | 43% |
| Goods and services under S75, all decisions | 19,872 | 36% |
| Motor finance (PCP / HP), all decisions | 19,840 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website