Car warranty mis-sold

[RuddyPrince]

Hello friends,

I am hoping you may be able to advise on an issue for my partner please.

She bought a used car last year. The finance company sold an additional third-party warranty (rather aggressively), specifically stating in writing it would cover all electrical and mechanical repairs to the car.

Upon attempting to use the warranty, it seems the car was over the mileage limit at the time the policy was sold and therefore the claim is denied.

I believe the warranty was mis-sold and misrepresented. I think she should be entitled to damages in the form of her repair cost being repaid (the misrepresentation act seems to allow for this in cases of negligence or fraud) as she believed she was covered by the warranty and if not for the mileage limit they would have paid for the repair. She was always going to get a warranty, the finance company just sold their "recommended" one. How is it lawful for them to sell something you can never use by hiding behind the small print?

Naturally, the finance company disagrees but their reviews contain many similar complaints. They're well aware of what they're doing, but presumably the commission on the warranty is too good for them to care.

What are your thoughts?

[echat11]

Hi RUDDYPRINCE

Welcome to LB

How was the warranty paid for?

It could also be that the Terms and Conditions in the warranty are 'unfair',

https://assets.publishing.service.go...23b/oft311.pdf

[RuddyPrince]

Hi echat11

Thank you, great to be here!

The warranty was paid for by ~10 payments to the finance company (through a payment third party, but clearly identified as being for the original finance company).

I did wonder if it was an unfair term under Group 3 but was then unsure if my claim would lie with the car finance company or the third party warranty company. The warranty terms are themselves issued directly from the third party warranty provider (but are specific to this finance company).

[echat11]

The OFT311 document has been removed, but there is Guidance from the CMA, with examples.

https://assets.publishing.service.go...d40/oft143.pdf

https://www.gov.uk/government/public...ct-terms-cma37

So no Credit Card payment.

Lodge a complaint with Trading Standards via CAB, they will give you a Ref No. you can write that on the letter below, just write - CAB / Trading Standards: Ref XXXXXXXXX.

https://www.which.co.uk/consumer-rig...s-ax9MJ6q9oCb2

Make sure you get Proof of Postage.

[Pezza54]

If you are correct about the car's clocked mileage when your partner bought it and the mileage limit set by the warranty company, it does sound that the policy was mis-sold by the finance company.

As the finance company are refusing your partner's claim your partner should refer the claim to the Financial Ombudsman Service. If they agree to investigate, their service is free and if they decide the finance company is wrong to refuse the claim, may order the finance company to refund all money paid for the warranty or deal with the repair to the car

[echat11]

Have you been through the Finance Company's formal complaints procedure?

The Finance Company will have a complaint procedure on their website, you need to go through their protocols, they are normally given 8 weeks to provide a final response / deadlock letter to you. The FOS will require a copy to proceed with your complaint.

[RuddyPrince]

Hello both,

I will get in touch with CAB to report this to Trading Standards - thanks.

Yes, I have been though the complaints process. I am unsure whether the Ombudsman will adjudicate as the warranty itself is not a regulated product. I will try and see where we get with that, thank you.

Will keep you updated as to my progress (if any!).

Thank you.

[Pezza54]

Finance companies, not products, can register with the FCA

[RuddyPrince]

Finance companies, not products, can register with the FCA

It's unclear to me though as the Ombudsman only seems to want to deal with certain issues relating to FCA regulated companies?

[RuddyPrince]

Unsurprisingly, the Ombudsman weren't interested.

[RuddyPrince]

The other side has now instructed counsel. Would anyone be willing to help when they presumably come back with a defence?

[echat11]

The other side has now instructed counsel. Would anyone be willing to help when they presumably come back with a defence?

When you say Counsel, what has Counsel been instructed to do?
The matters hasn't proceeded to Court, so I think you mean a response.

[RuddyPrince]

They have written advising they have been instructed and requested more time to review the case, and that they will issue an update within 2 weeks. I assume this means the finance company aren't interested in paying / settling and are going to fight me all the way?

[echat11]

They have written advising they have been instructed and requested more time to review the case, and that they will issue an update within 2 weeks. I assume this means the finance company aren't interested in paying / settling and are going to fight me all the way?

Best to wait and see exactly what they are say, then update the thread.

[RuddyPrince]

They have replied. Naturally, they reject the claim.

They state that the limited terms read on the call mentioned she should have reviewed the terms emailed after the purchase. However, listening to the call myself, the phone conversation said she was "viable for the package", and did not specifically highlight the mileage exclusion clause (or that she was in excess of it, meaning the warranty they were selling was worthless).

They also state they intend to recover costs if we issue on the grounds of our "unreasonable conduct in issuing a claim that lacks any merit whatsoever" (bs scare tactics in my view).

Whilst my partner did not review the terms, she also didn't need to explicitly agree to them or anything. They just arrived in her inbox after the purchase and have lived there ever since (though I accept, she somewhat accepted them by not withdrawing from the sale).

Where do we stand here? I am still of the position that they cannot sell a warranty that can't be used and then hide behind terms and conditions.