Navigating Car Complaints with the Financial Ombudsman

Dealing with a faulty car can be incredibly frustrating, especially when it's under a finance agreement. It's not always clear who is responsible for the issues, or what steps you should take to resolve the problem. Fortunately, in the UK, the Financial Ombudsman Service (FOS) exists to help settle disputes between consumers and financial businesses, including those related to car finance. Understanding how to effectively communicate your complaint to them is crucial for a successful outcome. This comprehensive guide will walk you through the process, detailing your rights and what information you'll need to provide.

When a consumer finds their financed car to be faulty, their immediate reaction is often to seek a repair or, in more severe cases, to return the vehicle. What many might not realise is that if you've obtained your car through specific finance agreements, such as conditional sale, hire purchase, or hire agreements, the finance provider itself carries a significant responsibility for the quality of the vehicle supplied. This is a fundamental aspect of consumer protection enshrined in UK law, designed to ensure fairness and uphold standards.

Understanding Your Rights: The Legal Framework

The foundation of consumer protection in the context of car finance largely rests on key pieces of legislation. These acts dictate the obligations of finance providers and the rights of consumers when a vehicle does not meet expected standards. Knowing which legislation applies to your specific situation is the first step in building a strong case.

The Consumer Rights Act 2015

For consumer contracts entered into from 1 October 2015 onwards, the Consumer Rights Act 2015 (CRA 2015) is the primary legislation. This Act implies a crucial term into the contract: that the car must be of satisfactory quality. This isn't just a vague notion; the Act provides specific criteria for what constitutes 'satisfactory quality'. A car's quality is deemed satisfactory if it meets the standard that a reasonable person would consider satisfactory, taking into account several factors:

• Any description of the goods: This refers to how the car was marketed or described to you at the point of sale. If it was advertised as 'excellent condition' but clearly isn't, this is relevant.
• The price or other consideration for the goods: The cost of the vehicle plays a significant role. A more expensive car is reasonably expected to be of a higher quality than a cheaper one.
• All other relevant circumstances: This is a broad category that allows for flexibility. For a car, this typically includes its age and mileage at the time of supply, as well as its known history. For instance, a brand-new car would have a much higher expectation of quality than a 10-year-old vehicle with 100,000 miles on the clock.

Beyond these general points, the CRA 2015 also specifies that the quality of goods includes their state and condition, and lists several aspects that are, in appropriate cases, components of quality. These include:

• Fitness for all the purposes for which goods of that kind are usually supplied: A car's primary purpose is safe and reliable transport. If it cannot fulfil this, it fails on this aspect.
• Appearance and finish: While minor cosmetic blemishes might be expected on a used car, significant defects in appearance or finish could be considered unsatisfactory.
• Freedom from minor defects: Even small, persistent issues that a reasonable person wouldn't expect can contribute to a car being deemed unsatisfactory.
• Safety: This is paramount. Any safety-related defect would almost certainly lead to a finding of unsatisfactory quality.
• Durability: The car should last for a reasonable period, considering its type, price, and age. A new car, for example, is expected to be free from defects for a considerable period.

The Consumer Credit Act 1974 (Section 75)

Another vital piece of legislation is the Consumer Credit Act 1974, specifically Section 75. This section offers an additional layer of protection if you used a credit card or a point-of-sale loan (a loan arranged directly by the retailer at the time of purchase) to buy the car. Section 75 allows you to raise a claim directly against the finance provider (the credit card company or loan provider) in certain circumstances where the supplier (the car dealership) has breached their contract or misrepresented the goods. This means you might have a claim against the credit provider even if the car dealership has gone out of business or is uncooperative. It's a powerful tool for consumer protection, but it applies specifically to credit agreements and not to all finance types.

Older Legislation and Business Contracts

It's important to note that if your contract was entered into before 1 October 2015, or if it's a business-to-business contract, different legislation applies. In these cases, the Sale of Goods Act 1979 or the Supply of Goods and Services Act 1982 would be the relevant statutes. While similar in principle, the exact wording and interpretations can differ, so it's crucial to identify the correct legal framework for your specific agreement.

Defining 'Satisfactory Quality' for New vs. Used Cars

The concept of 'satisfactory quality' is not one-size-fits-all. What is considered satisfactory for a brand-new vehicle will differ significantly from expectations for a used car. The FOS takes a pragmatic approach, considering what a reasonable person would expect under the specific circumstances of the purchase.

New Cars: High Expectations

For a new car, a reasonable person would expect a much higher standard of quality. It should be in perfect condition, free from defects, and capable of being used reliably for a considerable period without significant issues. Any manufacturing faults or early failures would likely be considered a breach of satisfactory quality, leading to the finance provider being responsible for remedies such as repair or replacement.

Used and 'Roadworn' Cars: Realistic Expectations

When it comes to a used or more 'roadworn' car, it's unreasonable to expect it to be in pristine, perfect condition. Such vehicles will inevitably show signs of wear and tear commensurate with their age and mileage. Minor cosmetic imperfections or expected maintenance issues (e.g., needing new tyres after a certain mileage) are generally not considered defects that would make a car of unsatisfactory quality. However, the finance provider might still be held responsible if the car was sold with defects that a reasonable person wouldn't expect on a car of that specific price, age, and mileage. For example, a major mechanical failure shortly after purchase on a relatively young, low-mileage used car would likely be viewed differently than the same failure on an older, high-mileage vehicle.

To illustrate the difference, consider the following table:

How to Talk to the Financial Ombudsman: Preparing Your Case

Before contacting the FOS, it's crucial to first raise your complaint directly with the finance provider. They should be given a reasonable opportunity to investigate and resolve your issue. Only if you are unhappy with their final response, or if they haven't provided a final response within eight weeks, can you escalate your complaint to the FOS. When you do, thorough preparation is key. The FOS acts as an impartial adjudicator, and their decision will be based on the evidence presented by both parties.

What the FOS Needs from You (and the Finance Provider)

To investigate a consumer's complaint comprehensively, the FOS will require a detailed set of documents and information. The more organised and complete your submission, the smoother the investigation will be. Here's what they typically ask for, much of which you should gather before making contact:

1. A Copy of the Credit Agreement: This is fundamental. It outlines the terms and conditions of your finance arrangement and confirms the parties involved. Ensure you have the full, signed agreement.
2. A Summary of Your Case with Your Comments: This should be a clear, chronological account of events. Start from the point of purchase, detail when the fault appeared, what steps you took (e.g., contacting the dealer, contacting the finance provider), and their responses. Be factual, concise, and include dates for all significant interactions. Explain why you believe the car was not of satisfactory quality at the point of supply.
3. A Copy of Your Complaint Notes: Keep a meticulous record of all communications. This includes dates, times, names of people you spoke to, a summary of the conversation, and any reference numbers. If you sent letters or emails, include copies. This demonstrates diligence and provides an undeniable paper trail.
4. Any Garage Job Sheets/Invoices: If you've had the car inspected or repaired, provide all related documentation. This includes diagnostic reports, repair invoices, and any notes from mechanics. These are crucial as they provide independent evidence of the faults.
5. Pre-Sale Checklist and Inspection Reports: If available, any documents detailing the car's condition at the point of sale are highly valuable. This could include a pre-delivery inspection (PDI) checklist for new cars or a detailed inspection report for used vehicles. These help establish the car's condition when it was supplied to you.
6. Any Other Evidence You're Relying On: This is a broad category. It could include:
   • Call Recordings: If you have recordings of conversations where agreements were made (e.g., about a repair), these can be powerful evidence, especially if there's a dispute over what was agreed.
   • Correspondence: All letters, emails, or messages exchanged with the dealership or finance provider regarding the fault.
   • Witness Statements: If anyone else witnessed the fault or relevant conversations, a written statement from them can be helpful.
   • Video Footage or Photographs: For faults that are intermittent, difficult to replicate, or visually apparent (e.g., a dashboard warning light that comes on sporadically, or significant rust), video footage or clear photographs can be incredibly helpful. This provides visual proof that a garage might not be able to replicate during a brief inspection.

Providing this information, along with your own detailed account, helps the FOS to build a comprehensive picture and decide whether the car was of satisfactory quality at the point of supply. Remember, the focus is on the condition of the car when it was provided to you, not necessarily faults that developed much later due to normal wear and tear or misuse.

Tips for Effective Communication with the FOS

• Be Clear and Concise: While you need to provide detail, present your information in an organised and easy-to-understand manner. Use headings, bullet points, and clear language.
• Stick to the Facts: Emotional language can detract from your case. Focus on objective facts, dates, and documented evidence.
• Understand the Basis of Your Complaint: Be clear whether your complaint is based on the Consumer Rights Act 2015 (satisfactory quality) or Section 75 of the Consumer Credit Act 1974, or both.
• Be Responsive: The FOS may have follow-up questions or request additional information. Respond promptly to their requests to avoid delays in your case.
• Manage Your Expectations: The FOS assesses cases based on what is fair and reasonable, considering all circumstances. Their decision might not always be exactly what you hoped for, but it will be an impartial assessment.

Frequently Asked Questions (FAQs)

Q1: How long does the FOS process take?

A1: The timeframe can vary significantly depending on the complexity of your case, the amount of evidence, and the responsiveness of both parties. Some cases are resolved relatively quickly, while more complex ones can take several months. The FOS aims to resolve cases as efficiently as possible, but thoroughness is paramount.

Q2: What kind of outcome can I expect from the FOS?

A2: The FOS can order the finance provider to take various actions. This could include ordering a repair of the vehicle, reducing the amount you owe, awarding compensation for financial loss or distress, or, in some cases, ordering the finance agreement to be cancelled and the car returned. The outcome will depend entirely on the specifics of your complaint and the evidence presented.

Q3: Do I need a solicitor to make a complaint to the FOS?

A3: No, you do not need a solicitor to complain to the Financial Ombudsman Service. The service is designed to be accessible to consumers, and you can represent yourself. However, if your case is particularly complex or you feel overwhelmed, you can seek independent legal advice or assistance from a consumer advice organisation.

Q4: What if I didn't get an independent inspection before buying a used car?

A4: While an independent pre-purchase inspection is always advisable, not having one doesn't automatically invalidate your complaint. The FOS will still assess whether the car was of satisfactory quality at the point of supply based on all available evidence, including its age, mileage, price, and the nature of the fault that developed.

Q5: Can the FOS help if my car broke down after the warranty expired?

A5: The FOS assesses whether the car was of satisfactory quality at the point of supply, not just within a warranty period. While a warranty provides specific cover, your statutory rights under the Consumer Rights Act 2015 (for example) extend beyond the warranty period. If a significant fault develops shortly after a warranty expires, and it's something a reasonable person would not expect given the car's age, mileage, and price, you might still have a valid complaint. The key is whether the underlying defect was present or inherent at the time of purchase.

Conclusion

Dealing with a faulty financed car can be a stressful experience, but understanding your rights and knowing how to approach the Financial Ombudsman Service can significantly empower you. By meticulously preparing your case, gathering all relevant documentation, and clearly articulating your complaint, you stand the best chance of achieving a fair and just outcome. Remember, the FOS is there to help resolve disputes impartially, ensuring that finance providers uphold their responsibilities under UK consumer law. Don't hesitate to use this valuable service if you find yourself in a dispute over a faulty vehicle.

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