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FOS decision: Black Horse Hire Purchase / SOGA

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  • FOS decision: Black Horse Hire Purchase / SOGA

    complaint
    Mr A complains that a car he bought under a hire purchase agreement with Black Horse
    Finance Limited was not of satisfactory quality when he bought it.


    background
    In July 2012, Mr A entered into a hire purchase agreement with Black Horse for a car which
    was four years old. He immediately experienced problems with it. The brakes failed on the
    journey back from its collection, and it later failed an MOT test. Mr A had the car tested by an
    independent inspector. It found a number of serious faults with the vehicle, and as the car
    was to be used for his work, his work licence for the car was removed.
    Mr A would like to return the car, receive compensation for his financial losses, and for his
    credit rating to be restored.
    The adjudicator recommended that the complaint should be upheld in part. He did not
    consider that the car was of satisfactory quality at the point of sale. The adjudicator was
    persuaded by a report from a garage which had repaired the car, as well as a report from an
    independent garage. The adjudicator recommended that Black Horse should:
     Recover the car from Mr A at no cost to him.
     Close the finance agreement with a zero balance and refund the deposit of £200.
     Refund 25% of the monthly payments made up to 23 January 2013.
     Refund in full any payments made after this date.
     Apply interest to all refunds at 8% simple per year from the date of payment to the
    date of settlement.
     Remove any adverse information passed to credit reference agencies in relation to
    this agreement.
     Reimburse Mr A for the cost of the MOT test carried out on 23 January 2013 (£40).

    The adjudicator did not consider that Black Horse should compensate Mr A for his loss of
    earnings. He was not persuaded that Mr A had taken reasonable steps to avoid these
    losses. The adjudicator noted that Mr A had not insured the car to provide cover for potential
    losses, and he had not repaired it after it failed the MOT.
    The adjudicator concluded that Mr A should not be compensated for legal costs he had
    incurred, as he took this advice after Black Horse told him that he could complain to this
    service.
    Mr A is not happy to accept the adjudicator’s recommendation. He says that he should be
    compensated for the loss of income he incurred as a result of the faulty car. Mr A points out
    that he should not have had to fix the car, as Black Horse should have taken it back at that
    point. Further, Mr A adds that insurance against losses is not common practice in the
    industry, so it is not unreasonable that he did not take it out.
    Mr A says that he would not have incurred legal fees if Black Horse had dealt with his
    complaint properly.
    Black Horse said that it will close Mr A’s account with no further payments due, and remove
    any adverse credit references on his file. Mr A has paid two instalments to date, and a £200
    deposit. This is a total sum of £885.48. Black Horse has already collected the car.
    Ref: DRN6027057
    2
    my findings
    I have considered all the available evidence and arguments to decide what is fair and
    reasonable in the circumstances of this complaint.
    I accept that it was an important implied term of the hire purchase agreement that the car
    should be of satisfactory quality. I take into account its age, mileage and price. I accept that
    the faults present when Mr A signed the hire purchase agreement meant that it was not of
    satisfactory quality.
    Black Horse has collected the car. It has pointed out that Mr A has paid two monthly
    instalments and a deposit of £200. I consider that as he had use of the car for six months,
    but only paid for two of these months, Mr A should not be refunded any sum he paid under
    the agreement.
    The adjudicator recommended that Black Horse should repay the cost of the MOT which is
    equivalent to £40. I consider however that Mr A would have incurred this cost regardless of
    any faults present in the car. As such, I do not consider that Black Horse should repay this
    amount to Mr A.
    There is no doubt that the on going problems with the car caused Mr A distress and
    inconvenience. I note that the adjudicator proposed that that a partial refund of Mr A’s
    monthly payments was made in recognition of this. Given that, I do not consider that a
    refund of the two monthly payments made by Mr A is warranted, I consider that Black Horse
    should pay Mr A £150 for distress and inconvenience.
    Black Horse should remove any adverse information it has entered on Mr A’s credit file in
    relation to the agreement.
    Mr A says that he should be compensated for his loss of earnings since the car failed its
    MOT in January 2013 and has been off the road. I agree with the adjudicator that Mr A could
    have minimised his losses by having the car repaired, and claiming the cost of this from
    Black Horse. In the circumstances, I do not consider that it would be fair or reasonable for it
    to compensate Mr A for any loss of income.
    Mr A took legal advice regarding the faults in the car. He would like Black Horse to
    reimburse him for the cost he incurred in doing so. It told him however in a letter dated
    11 March 2013 that Mr A had the right to make the complaint to us. I do not therefore
    consider that he had to take legal advice to know where he should complain to. I find that
    Black Horse did deal with Mr A’s complaint when he raised the problem with it.
    Mr A has pointed out that he is still receiving regular written requests for payments under the
    hire purchase agreement. I would suggest that Black Horse stops these requests given the
    fault with the car and that the agreement is to be cancelled.
    my final decision
    My decision is that Black Horse Finance Limited should:
     Cancel the hire purchase agreement and stop sending Mr A demands for payment
    under it.
     Remove any adverse credit information it has recorded on Mr A’s credit file.
     Pay Mr A £150 for distress and inconvenience.

    Rosemary Lloyd
    ombudsman
    Last edited by Amethyst; 16th February 2014, 12:02:PM.
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps
    Tags: None

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