FCE Bank Plc · DRN-6173490

The complaint Mr K complains about the quality of a vehicle that was supplied through a motor finance agreement with FCE Bank Plc trading as Ford Credit (FCE). What happened In March 2025, Mr K acquired a new car through a hire purchase agreement with FCE. The cash price of the car was £39,245.39. Mr K was due to make an initial instalment of £623.59, followed by 47 instalments of £613.59, and an optional final repayment of £15,141. In August 2025, Mr K complained that he was experiencing an intermittent fault with the car. He said the manufacturer carried out a repair to the transmission, but the fault returned within days. The manufacturer recommended the gearbox and oil cooler be replaced. Mr K said that at that point he asked to reject the car. However, he said he was only offered a partial refund of three-monthly repayments due to the mileage he’d covered. In November 2025, FCE issued their final response to Mr K’s complaint, which it upheld in part. In summary, it confirmed Mr K had reported issues with the gearbox, which was repaired in November 2025, and that it was considered the car had no further issues. It said Mr K reported that the issues had returned and asked to reject it. However, it said Mr K refused to allow the dealership to carry out a diagnosis to confirm the issues. To acknowledge the inconvenience caused, FCE offered to pay Mr K £460.19 for impaired usage and £150 for the inconvenience caused. In December 2025, FCE issued a second final response to Mr K’s complaint. In summary, it concluded that following an inspection of the car by the dealership, which was arranged by Mr K, it accepted a rejection of the car. It confirmed this was in addition to the offer already made in its first response. It also confirmed some payments would be retained for usage. Unhappy with FCE’s outcome, Mr K brought his complaint to this service, where it was passed to one of our investigators. Mr K said he wants the agreement to be unwound and to receive a refund of all his monthly repayments. In addition, Mr K is seeking £580 in losses for the removal of vehicle‑specific equipment, and compensation for the distress and inconvenience caused. In February 2026, the investigator issued their view and recommended that Mr K’s complaint should be upheld. In summary, the investigator concluded that Mr K should receive a 25% impaired‑usage refund from September 2025 to the date of settlement, and £250 in compensation. The investigator also recommended the car be rejected. Mr K didn’t accept the investigator’s view and responded to say he felt the redress was insufficient given the type of car and severity of the fault. However, as the investigator’s view remained unchanged, Mr K asked that his complaint be referred to an ombudsman for a final decision.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. In considering what is fair and reasonable, I have reviewed all the evidence and information afresh, as well as the relevant law and regulations, regulators’ rules, guidance and standards, codes of practice and, where appropriate, what I consider to have been good industry practice at the relevant time. I have read and considered the whole file, but I will focus my comments on what I believe is most relevant. If I do not address a particular point, it is not because I have overlooked it, but because I do not think it is necessary to comment on it in order to reach what I believe is the right outcome. Mr K complains about a hire purchase agreement. Entering into consumer credit contracts of this type is a regulated activity, so I am satisfied we can consider Mr K’s complaint about FCE. FCE is also the supplier of the goods under this agreement and is responsible for a complaint about their quality. The Consumer Rights Act 2015 (CRA) is relevant in this case. It states that under a contract to supply goods, there is an implied term that “the quality of the goods is satisfactory, fit for purpose and as described.” To be considered satisfactory, the CRA says goods must meet the standard that a reasonable person would consider satisfactory—taking into account the description of the goods, the price, and all other relevant circumstances. The CRA also makes clear that durability is part of satisfactory quality. In a case involving a car, the relevant circumstances a court might consider could include the vehicle’s age, mileage at the time of sale, and its history. Here, the car was acquired new with a cash price of around £39,245. I think it is fair to say that a reasonable person would expect a higher level of quality than from a second‑hand, more road‑worn car, and that it should be usable—free from defects—for a considerable period. From the information provided, I am satisfied the car had a fault. Neither party disputes this. Mr K has consistently maintained that the gearbox was faulty, and in its second final response, FCE said the dealership confirmed the gearbox needed replacement. As a result, FCE agreed to reject the car. I therefore do not consider the vehicle’s quality to be in dispute. What appears to be in dispute is the fairest resolution in the circumstances. In an email to the investigator dated in March 2026, Mr K said that in addition to rejection, he wanted a full refund of all repayments made, less 50% for fair usage, reimbursement for the removal of the vehicle accessories, the £155 service fee, taxi fares, additional insurance products purchased with the car, and £700 in compensation for distress and inconvenience. Under the CRA, if goods are not of satisfactory quality, they do not conform to the contract. Section 19 of the CRA sets out the remedies available to the consumer, one of which is the final right to reject. I am satisfied that rejection is reasonable here, given that the initial repair did not resolve the issue. Under the CRA, FCE is entitled to reduce any refund to reflect fair usage. The CRA states: “If the consumer exercises the final right to reject, any refund to the consumer may be reduced by a deduction for use, to take account of the use the consumer has had of the

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goods in the period since they were delivered…” So, I’m satisfied that FCE can apply a reasonable reduction based on Mr K’s use of the vehicle. In his March 2026 email, Mr K said the mileage was 8,976. He has had the car for about 12 months, and the agreement’s mileage allowance was 9,000. So I’m satisfied that Mr K has used the car as he initially intended. Although Mr K says he avoided certain types of travel due to the issues, I have still considered his intended usage at the point of supply—9,000 miles—which is what he has been able to achieve. Given this, I think it is reasonable that Mr K pays for the use of the car, so I am not persuaded a full refund is fair in the circumstances. That said, I recognise there would have been some impaired use due to the issues, and so I agree with the investigator that a 25% refund of his monthly instalments from September 2025 (when the issues arose) to the date of settlement is fair. I think this fairly reflects the impaired use Mr K experienced. I have considered the extras Mr K had fitted to the car. I recognise he feels he would not have incurred these costs had the car been of satisfactory quality. However, I’m not persuaded FCE should absorb them, as they were optional extras that weren’t a statutory requirement when the car was supplied. Mr K chose to have these added for his own benefit or enjoyment. I’ve also not considered the additional charges Mr K described in his latest email to the investigator—such as additional insurance products or taxi fares. This is because he would have benefitted from the insurance while it was active; as is the nature of insurance, you do not need to make a claim to benefit from the cover. Similarly, I cannot see that the service fee formed part of the hire purchase agreement Mr K entered into. Mr K is also still in possession of the vehicle by choice, so he would likely still have been able to benefit from any cover or service-related features provided under this fee. As for the taxi fares, I’m satisfied they would have been in addition to his full use of the vehicle. I’ve already concluded that Mr K had the use of the car as he intended within the mileage allowance, so I do not consider FCE should be liable for these costs either. That said, I do think Mr K has been inconvenienced as a result of the issues with his car—for example, dealing with the dealership regarding repairs for what was meant to be a fault‑free new car, and having to remove the optional extras fitted to it. All things considered, I am satisfied that £250 fairly reflects the inconvenience caused, and I will be instructing FCE to pay this amount to him. My final decision Having thought about everything above along with what is fair and reasonable in the circumstances I uphold this complaint and instruct FCE Bank Plc trading as Ford Credit to: • collect the car at no additional collection cost to Mr K • end the hire purchase agreement and remove it from Mr K’s credit file • refund to Mr K 25% of his monthly instalments made from September 2025 as directed in my decision • pay Mr K £250 in compensation for the distress and inconvenience caused • remove any adverse information that may have been recorded with the credit reference agencies in relation to the agreement. FCE Bank Plc trading as Ford Credit should pay 8% yearly simple interest on all refunds calculated from the date of payment to the date of settlement.

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If FCE Bank Plc trading as Ford Credit considers that it’s required by HM Revenue & Customs to withhold income tax from the interest part of my award, it should tell Mr K how much it’s taken off. It should also give Mr K a tax deduction certificate if he asks for one, so he can reclaim the tax from HM Revenue & Customs if appropriate Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K to accept or reject my decision before 16 April 2026. Benjamin John Ombudsman

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