complaint
Mr H complains that ACF Car Finance Limited mis-sold him a finance agreement, taken out
to buy a car.
background
Mr H bought a car in April 2007 with a fixed-sum loan from ACF. He part-exchanged his
existing car as part of the deal. Mr H – whose first language is not English – says that he
showed the agreement to his employer the next day. His employer queried the total cost as
well as the insurances included in the deal. Mr H says he believed he was buying a car for
approximately £3,400 but ended up with a loan agreement that would mean he would repay
over £11,000. He says that, on further advice from a national charity, he returned the car to
the dealership and tried to cancel his purchase.
ACF recovered the car from the dealership in June 2007 and sold it at auction. The sale
price was deducted from Mr H’s outstanding debt and the debt sold to a collection agent in
November 2008. That agent is trying to recover the outstanding balance of just over £9,000
from Mr H.
I issued a provisional decision on this complaint in September 2013. In it, I explained why I
intended to uphold the complaint in part. I did not agree that the car salesman had misled
Mr H about the car’s price or misrepresented the loan agreement to Mr H. I was satisfied that
the price of the car, the total cost of credit, the total amount repayable and the monthly
repayments were all clearly set out in the agreement. Mr H chose to buy the car and signed
the agreement. As such, I was satisfied that Mr H owed the outstanding debt for the car.
However, I found that the insurances bought as part of the agreement were cancellable and
Mr H should have been allowed to cancel them when he tried to withdraw from the
agreement. I found that ACF should reduce Mr H’s debt by the insurance element of Mr H’s
loan.
ACF accepted my provisional decision and agreed to reduce Mr H’s outstanding debt by
£4,324.18.
Mr H did not. His representative said, in summary:
my findings
I have considered all the available evidence and arguments to decide what is fair and
reasonable in the circumstances of this complaint. Having done so, I find no reason why I
should depart from my provisional conclusions.
I am satisfied that I have already considered the arguments put forward by Mr H’s
representative. In short, he didn’t have to buy the car. I find it difficult to understand why he
would sign a document written in a foreign language if he didn’t understand it. Whilst I
appreciate it might have been difficult for Mr H to have a work colleague or his employer
accompany him to the dealership, he could have asked to take the agreement away to
review it with someone who could better explain it to him. Had the salesman refused, Mr H
might reasonably have walked away from the deal.
I am satisfied that the insurance element of the agreement – including the cost of credit, this
was £4,324.48 – was cancellable. Whilst I am satisfied that Mr H should pay for the car, I do
not consider it fair or reasonable for him to be held liable for the cost of the insurance. ACF
should deduct this from Mr H’s outstanding debt.
Mr H is under no obligation to accept my decision; if he does not, he remains free to pursue
the matter in other ways, such as through the courts. I would simply point out that ACF is not
bound by my decision if Mr H does not accept it.
my final decision
My final decision is that I uphold this complaint in part and order ACF Car Finance Limited
to:
ombudsman
Mr H complains that ACF Car Finance Limited mis-sold him a finance agreement, taken out
to buy a car.
background
Mr H bought a car in April 2007 with a fixed-sum loan from ACF. He part-exchanged his
existing car as part of the deal. Mr H – whose first language is not English – says that he
showed the agreement to his employer the next day. His employer queried the total cost as
well as the insurances included in the deal. Mr H says he believed he was buying a car for
approximately £3,400 but ended up with a loan agreement that would mean he would repay
over £11,000. He says that, on further advice from a national charity, he returned the car to
the dealership and tried to cancel his purchase.
ACF recovered the car from the dealership in June 2007 and sold it at auction. The sale
price was deducted from Mr H’s outstanding debt and the debt sold to a collection agent in
November 2008. That agent is trying to recover the outstanding balance of just over £9,000
from Mr H.
I issued a provisional decision on this complaint in September 2013. In it, I explained why I
intended to uphold the complaint in part. I did not agree that the car salesman had misled
Mr H about the car’s price or misrepresented the loan agreement to Mr H. I was satisfied that
the price of the car, the total cost of credit, the total amount repayable and the monthly
repayments were all clearly set out in the agreement. Mr H chose to buy the car and signed
the agreement. As such, I was satisfied that Mr H owed the outstanding debt for the car.
However, I found that the insurances bought as part of the agreement were cancellable and
Mr H should have been allowed to cancel them when he tried to withdraw from the
agreement. I found that ACF should reduce Mr H’s debt by the insurance element of Mr H’s
loan.
ACF accepted my provisional decision and agreed to reduce Mr H’s outstanding debt by
£4,324.18.
Mr H did not. His representative said, in summary:
Mr H was given nothing to show the price of the car and/or part-exchange value of
his previous car;
he was pressured into buying the car and simply signed where he was told;
he was working 6 days a week, therefore had limited time in which to look for a car;
he couldn’t take a work colleague or his employer with him to buy the car because of
conflicting working hours and for childcare reasons; and
his employer was also pressured into verifying Mr H’s employment status and other
personal information.
his previous car;
he was pressured into buying the car and simply signed where he was told;
he was working 6 days a week, therefore had limited time in which to look for a car;
he couldn’t take a work colleague or his employer with him to buy the car because of
conflicting working hours and for childcare reasons; and
his employer was also pressured into verifying Mr H’s employment status and other
personal information.
my findings
I have considered all the available evidence and arguments to decide what is fair and
reasonable in the circumstances of this complaint. Having done so, I find no reason why I
should depart from my provisional conclusions.
I am satisfied that I have already considered the arguments put forward by Mr H’s
representative. In short, he didn’t have to buy the car. I find it difficult to understand why he
would sign a document written in a foreign language if he didn’t understand it. Whilst I
appreciate it might have been difficult for Mr H to have a work colleague or his employer
accompany him to the dealership, he could have asked to take the agreement away to
review it with someone who could better explain it to him. Had the salesman refused, Mr H
might reasonably have walked away from the deal.
I am satisfied that the insurance element of the agreement – including the cost of credit, this
was £4,324.48 – was cancellable. Whilst I am satisfied that Mr H should pay for the car, I do
not consider it fair or reasonable for him to be held liable for the cost of the insurance. ACF
should deduct this from Mr H’s outstanding debt.
Mr H is under no obligation to accept my decision; if he does not, he remains free to pursue
the matter in other ways, such as through the courts. I would simply point out that ACF is not
bound by my decision if Mr H does not accept it.
my final decision
My final decision is that I uphold this complaint in part and order ACF Car Finance Limited
to:
make arrangements with the debt collection agent that currently holds this account so
that Mr H’s outstanding debt is reduced by £4,324.48; and
update the information it has registered about this agreement with any credit
reference agencies to reflect this.
Simon Begleythat Mr H’s outstanding debt is reduced by £4,324.48; and
update the information it has registered about this agreement with any credit
reference agencies to reflect this.
ombudsman