Is There A Car Finance Ombudsman?
Car finance agreements can sometimes get into disputes leading to complaints. If you currently have an issue then we're sorry to hear that! 😶 Firstly, remember that if you have problems with your car, and you have bought your car via the dealership, or used finance to purchase it, then you have legal rights to protect yourself. If the car has faults within the first 30 days, the Consumer Rights Act allows you to return the vehicle to the dealer for repairs, replacement or a refund.
However, did you know that if the issue is with either car or your lender, you can take the matter further, to the UK car Finance Ombudsman. How does the ombudsman help you, and how long will it take? Let's examine that.
What Is The Financial Ombudsman Service?
The UK Parliament established the Financial Ombudsman Service (FOS) in 2001. This official body sorts out complaints between businesses and their clients. They provide free services on issues concerning financial companies, including mortgages, insurance and car finance.
Using the Financial Ombudsman services is a much cheaper and safer way to resolve issues than the courts. They follow the regulations set out in the Consumer Rights Act to sort out the dealership and customer issues.
Car Finance Complaints The Financial Ombudsman Receives
Buyers can file complaints with the ombudsman's office if the car they bought at the dealership is faulty, and the dispute is not resolved. This issue also comes up if the vehicle is not of satisfactory quality as they expected. This is common with used cars.
When you sign a car finance deal with the dealership, especially a hire purchase, PCP or a lease, there are extra charges. Dealers will charge excess mileage and damage fees at the end of the contract agreement. If you are unhappy with the costs, and you think they are unreasonable or not as described in your agreement, you can file a complaint with the Financial Ombudsman office.
Dealers always provide details of the car and loan terms before you sign the agreement. This information prompts buyers to decide on the type of car to buy or what kind of loan to sign up for. However, if you find out that this information was misdescribed or misrepresented and the dealership is not owning up, you have the right to escalate the issue further.
Financial lenders expect the buyer to keep up with the monthly payments as agreed on in the contract. However, some might encounter financial difficulties within this period, making it hard to settle the debt. If a buyer feels like they have been unfairly treated, they can complain to the ombudsman.
Early Contract Exit
Getting out of a car finance contract early is quite challenging. You might attract penalties, and the lenders might make it hard for you to exit the contract. At this point, you can contact the Financial Ombudsman Service to assist you with how to handle this issue with your lender.
How Does It Work?
If you have a problem with your car finance deal or vehicle, there is a procedure to follow for proper assistance. Here are the steps.
Contact Your Financial Lender First
If you bought the car via hire purchase or PCP, it's advisable to first talk to the finance company. Inform them of the issue for them to advise whether they can solve it. If the car is faulty or not satisfactory, they should offer a replacement, repair services or give you a refund.
When making this complaint, make sure you are within the proper legal limits. As a UK resident, you have a 30-day limit under the Consumers Rights Act. However, other legal protections can go up to 6 years. If the lender does not budge, you can go to the ombudsman office. If you live in Scotland your rights are a little different so do check this out.
Talk To The Financial Ombudsman
You can get in touch with the Financial Ombudsman office within six months of the lender's last communication. The process requires you to fill a form with your personal information, the problem, and other complaint details.
The Ombudsman Contacts The Lender
Once the complaint is received, they will contact the finance company to get their side of the story. Based on this investigation, they can weigh on the issue reasonably to come up with a decision.
When the ombudsman office received the complaint, they should get back to you in 10 days. However, the case handler's complete initial investigation should take 90 days, depending on the complaint's complexity.
The Ombudsman Contacts The Complainant
The financial ombudsman office will then get back to you with a verdict. If the business is in the wrong, the ombudsman will ask them to settle the matter. If there is no financial loss incurred, they will advise based on the initial assessment.
The Ombudsman Does The Final Assessment
The buyer can disagree with the findings of the initial assessment and request a final decision. The ombudsman office can look at the case afresh and offer the final verdict, which can't be resolved further. If you are still unsatisfied with the final decision, you have a right to go to court for further assistance.
However, if they decide the lender is wrong, they can ask the financier to sort out the issue or pay you compensation.
How To Contact The Financial Ombudsman Office?
The UK Financial Ombudsman Office offers services for free. You can contact them via their helpline between Monday to Friday, 8.00 a.m. to 5.00 p.m. You can also reach out to them online by sending them an email available on their website. To file a complaint, customers can fill a form available online.
Complaints on a faulty car or unfair terms on a vehicle financing deal are a standard feature of complaints to the Ombudsman. Customers are required to contact the dealership or financial lender first to help solve the issue.
However, if this process does not work, you can go ahead and file a complaint with the Financial Ombudsman's Office. They conduct assessments and decide whether the lender should sort out the issue.
If you get a car financing deal from us here at Carmoola, we are committed to resolving any issues according to our set procedures and legal guidelines. We like to treat all our customers in a fair and considerate manner - we want you to be happy and supported - you are important to us! 😀 However, if you are not satisfied with the outcome, 😶 you can be referred to the Financial Ombudsman Service for further assistance.