The Financial Ombudsman (FOS) and complaints


The problem with FOS decisions is that they can go wider than the law.

Author: Nona Bowkis
Reading time: 2 minutes

This article is 7 years old.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

We often get calls from car dealers who feel they are being pushed into a corner by a finance company following a customer complaint.

The usual scenario is that the customer has complained about a fault which the dealer has not upheld and so the customer has marched off to the finance company who worry about the complaint being escalated to the FOS.

The problem with FOS decisions is that they can go wider than the law which basically means they can come to any decision the person investigating thinks fit. This does lead to some bizarre and unfair decisions on which there is no appeal once the FOS system is exhausted.

However, the customer is entitled to complain to the finance provider as

  1. the car will belong to the finance company until the finance is cleared
  2. the finance company will have ‘joint and several liability’ for the vehicle.  

Unfortunately, many of the finance companies now take a soft approach towards the customer on the basis that

  1. they feel the FOS will rule against them regardless and
  2. if they pay the customer, they simply look to the dealer to reimburse them and so there is no real loss to them.

This can put the dealer at a disadvantage but this shouldn’t mean that dealers roll over and we quite often have backs and forths with finance companies on behalf of our clients which lead to the finance company either backing the dealer or coming to a mutually satisfactory deal on the loss or agreeing to take the hit themselves and not pursue our client at all. Obviously each case will have different facts but there are plenty of finance companies out there and so if one wants your business, you need to be sure that your account manager is as willing to look after your interests as much as their own and their customers.

Lawgistics members can get advice on problems arising from dealing with finance companies by contacting the Legal Team.

Nona Bowkis

Legal Advisor

Read more by this author

Getting in touch

You can contact us via the form or you can call us on 01480 455500.