Oodle Financial Services Limited · DRN-6243353

The complaint Mr C is unhappy with the car supplied under the hire purchase agreement with Oodle Financial Services Limited (Oodle). When I refer to what Mr C and Oodle have said or did, it should also be taken to include things said or done on their behalf. What happened In November 2024 Mr C entered into a hire purchase agreement with Oodle to acquire a car first registered in January 2020. At the time of acquisition, the car had travelled around 70,148 miles. The total cash price of the car was £10,269. There was an advance payment of £1,000. The first payment due was £308.14 followed by 58 monthly payments of £258.14 and one final payment (which includes payment of the option to purchase) in the total amount of £308.14. Mr C said that from the very first use, he noticed the car was responding abnormally. He said that during acceleration the engine’s power delivery was intermittent, causing abrupt jerks and lack of smooth operation; during braking, the car exhibited intense shocks, as though the transmission momentarily lost its connection with the wheels. He said this was evident from the time of initial collection of the car – a fact confirmed by a family witness present with him at collection time. Mr C said that, as a non-expert in this domain, he did not realize immediately that the car had such grave issues because, he said, he was provided with an expert report stating the car had been thoroughly inspected and tested prior to supply. So, he said, he did not perform any additional diagnostics, as he placed complete trust in the documentation evidencing the car’s inspection and testing. Mr C provided a report, dated 8 May 2025, from one of the car’s main dealers which confirms the gearbox was juddering and there was play in both inner CV joints and differential bearings in the gearbox. At the time, the car had travelled around 77,195 miles (approximately 7,047 miles since supply). The report stated the inspection found play in both the inner CV joints and the differential bearings in the gearbox. It also said the car required a new automatic gearbox and driveshafts. Mr C also provided another estimate from another garage that indicated that the main differential was faulty. Given a massive play in bearings, they too recommended replacing the transmission at an estimated cost of the repairs at £5,808.46. Mr C also believes that the car was mis-sold to him as he says he was assured by the broker that the car could be used as a taxi, however, he said the terms of the agreement state otherwise. Overall, as a solution Mr C would like Oodle to restore the car to its proper working condition or, alternatively, he would like a price reduction equivalent to the costs necessary for repairing the car. On 18 July 2025, Oodle wrote to Mr C. They said an independent inspection was completed on the car and Oodle quoted from the inspection:

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‘‘C1. We note from the information provided in our instructions that the vehicle has covered 7’032 miles in 161 days since purchase to the reported failure date. However, after confirming the current mileage, the vehicle has covered 10’381 miles since purchase to the date of our inspection. C2. We would conclude after completing eight miles in the vehicle it was found, when placing the vehicle under load or when driving the vehicle on an incline a judder was noted. C3. With the evidence taken into consideration we would suspect that this would be a potential internal gearbox related fault, which would require further investigation under workshop conditions. C4. The faults with the vehicle would not have been present or in development at the point of sale after 10,000 miles of further usage and explains why the condition was not apparent soon after sale, requiring the further mileage to become established and suggests it was serviceable at the time of delivery. It will most likely be appreciated that any preowned vehicle can suffer wear and deterioration, which develops after sale and requires maintenance repairs to be completed to keep the vehicle in serviceable state. At 80,000 miles this repair would be considered to be commensurate with the vehicles age recorded mileage, although the repairs may be considered unexpected, due to the vehicle’s mileage, it cannot be considered premature. Had this condition been present at the point sale we would have expected it to have materialised within the first 1’000 – 1’500 miles of use.’’ At the end of that letter Oodle said that, as the inspection concluded, the faults would not have been present or developing from point of sale, they were unable to uphold Mr C’s complaint. Mr C remained unhappy with the above. As such, he referred his complaint to the Financial Ombudsman Service (Service). Our investigator looked at Mr C’s complaint and was of the opinion that the complaint should be upheld. The investigator proposed what they deemed to be a fair and reasonable redress. Oodle did not agree, as such the complaint has been passed to me to decide. After reviewing the case, I issued a provisional decision 25 February 2026. In the provisional decision I said: ‘‘What I’ve provisionally 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. Where evidence is unclear or in dispute, I reach my findings on the balance of probabilities – which is to say, what I consider most likely to have happened based on the evidence available and the surrounding circumstances. I am very aware I have summarised this complaint very briefly, in less detail than has been provided, and largely in my own words. No discourtesy is intended by this. If there is something I have not mentioned, I have not ignored it. I have not commented on every individual detail. But I have focussed on those that are central to me, reaching what I think is the right outcome. This reflects the informal nature of our service as a free alternative to the courts.

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What I need to decide in this case is whether the car Mr C acquired was misrepresented to him by Oodle and/or their agents. To make a finding of misrepresentation, I would need to be satisfied that Mr C was told a false statement of fact which caused him to enter into a contract he would not have done otherwise. In summary, Mr C said the car was mis-sold to him as he was assured by the broker that the car could be used as a taxi, however, he said that now he is aware that the terms of the agreement state otherwise. Oodle, on the other hand, said that full terms and conditions of the agreement were sent directly to Mr C before signing and the agreement clearly advised him that he should only sign if he has read and understood the terms. Therefore, I have considered what both sides have said and provided. First, I should say that I believe that Section 56 of the Consumer Credit Act 1974 should apply here. This section deals with “antecedent negotiations” and it explains that finance providers are liable for what they say and for what is said by a credit broker or a supplier (in certain circumstances) before the consumer takes out the credit agreement. Considering all the circumstances of this case, I think most likely, this section does apply. However, I am only considering the aspects Oodle are responsible for and the ones I am able to look at. So, I cannot look at certain actions and/or inactions of the dealership(s) or broker which Mr C might be unhappy about, such as what happened after the car’s acquisition. Therefore, I am only looking at the events that have been raised by Mr C with Oodle, and the ones they were provided an opportunity to address in their 18 July 2025 correspondence. What I need to decide in this case is whether the car and the agreement Mr C entered into was misrepresented to him by Oodle and/or their agents. To make a finding of misrepresentation, I must be satisfied that Mr C was given a false statement of fact that led him to enter into a contract he otherwise would not have entered. Mr C provided our service with a copy of two calls he had with the broker. From this, I can hear that during the first call the broker assured him that he could use the car for taxi purposes or for a delivery job. However, as Mr C was adamant he wanted to know for sure the broker said he would call Oodle to make sure and call Mr C back. During the second call, the broker called and explained to Mr C that he can use the car for taxi services. Therefore, it is clear that Mr C was told that he could use the car for taxi services. As such, a false statement of fact was made. Based on Mr C’s testimony, I think it is, most likely, this false statement led him to enter into a contract he otherwise would not have entered into. Considering he was after a car that he could use for his work as a taxi or delivery driver. I know Oodle believes that, as full terms and conditions of the agreement were sent directly to Mr C before signing and the agreement clearly advised him that he should only sign if he has read and understood the terms, they should not be responsible for the misrepresentation. However, Mr C is adamant that he only entered into the contract because the broker told him he could use the car as a taxi or for his delivery business. He spent adequate amount of time verifying this and he specifically entered into the contract believing that the representation was correct and he relied on it to his detriment. I think, most likely, had Mr C known there was a secondary permission process, as per the contract which stipulates that he needs written confirmation from Oodle before using the car for taxi purposes, Mr C would not have entered into the contract in question. Overall, I believe a misrepresentation did occur. In addition, I thought about what is fair and reasonable and about the FCA Consumer Duty. I think Oodle should have provided information to Mr C in a way that is clear, fair, and not

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misleading. They should have given him this information at the right time, and presented it in a way he could understand, so that he could make well informed and good decisions to achieve his financial objectives. Oodle had a duty to deliver good outcomes, and I do not think this happened here, given the broker on the call did specifically tell Mr C that he could use his car for taxi purposes. Considering all of the above, I also thought about the fact that the remedy for misrepresentation is usually rescission of the contract to put the consumer back in the position they would have been in, had it not been for the false statement. It is not to give the consumer the benefit of the false statement. I am aware of the legislation and case law surrounding misrepresentation and rescission of contract, and I have taken it into consideration. However, I do not think it would be a fair and reasonable remedy for Mr C to get all his payments back, considering the specific circumstances of this case. I say this because as time passed, Mr C continued to use the car, putting significant number of miles on it. He continued to have use of the car whereby bi- annually he was travelling about 7,000 miles in it. With that in mind, he had the car for a significant period and covered a reasonable number of miles, so he gained a benefit from the car. As such, I think it is only fair and reasonable that he pays for the benefit he gained. Also considering Mr C had done a significant number of miles and got significant benefit from the use of the car, I think a full refund would be disproportionate and unfair to the business. When thinking about putting Mr C back in the position he would have been in, had it not been for the false statement, I believe, had Mr C purchased a similar car, most likely he would have incurred similar repayments during the period in question. As such, in this case, I think rescission of the contract whereby Mr C receives all his payments back is not the most fair and reasonable solution at the current stage. I also considered that Oodle do not think they should be responsible for the faults with the car. As such, they most likely do not think it would be fair for Mr C to be allowed to return the car with the current fault. Oodle, most likely, would expect the car to be returned in the condition it was sold in, and now the car has a significant fault with the gearbox. However, I have considered that, most likely, the car was of unsatisfactory quality when it was supplied to Mr C. As such, I do not think it would be unreasonable for Mr C to return the car in the state that it is in. I’ll explain below. Oodle has made a point that the Consumer Rights Act 2015 (CRA) should not apply to Mr C as he purchased the car for business purposes. As such they have argued that Mr C’s complaint should instead be considered under the principles set out in the Sale of Goods Act 1979. From what Mr C said, I understand that he intended to use the car for personal use but also as a sole trader he intended to use if for business; mainly he intended to use the car himself to do deliveries or as a taxi. Based on the above I thought about what legislation should apply to the circumstances of this complaint and I do agree with Oodle that I do not think it would be fair to apply the CRA because when Mr C was acquiring the car, he was not acting as a ‘consumer’. A ‘consumer’ is defined as one that is acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession and Mr C intend to use the car for a taxi or deliveries. However, I think Mr C was acting in a dual capacity as he said he intended to use the car for personal purposes and taxi/delivery purposes. I think, given his intended use of the car and the impact on his profession, it would not be fair and reasonable to apply the CRA when looking at the quality aspects of Mr C’s complaint. However, I also disagree with Oodle when

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they say Mr C’s complaint should instead be considered under the principles set out in the Sale of Goods Act 1979. Mr C entered into a hire purchase agreement which, in summary, under this type of contract the ownership does not pass until the option to purchase is exercised. As such, the Sale of Goods Act 1979 does not apply to this type of an agreement. Considering the specific circumstances of this case, I think it would be fair and reasonable to apply the Supply of Goods (Implied Terms) Act 1973 (SG(IT)A 1973). I say this after considering what I explained above plus bearing in mind the fact that it seems that the agreement Mr C entered into was more of a business-to-business agreement. Under the SG(IT)A 1973 there is an implied term that the goods supplied will be of satisfactory quality. The SG(IT)A 1973 says that goods will be considered of satisfactory quality if they met the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances. I think in this case those relevant circumstances include, but are not limited to, the age and mileage of the car, and the cash price. The SG(IT)A 1973 says the quality of the goods includes their state and condition, as well as other things like their fitness for all the purposes for which goods of the kind in question are commonly supplied, appearance and finish, freedom from minor defects, safety, and durability. In Mr C’s case the car was about four years old and 10 months, with a total cash price of £10,269. It covered around 70,148 miles. A such the car travelled a reasonable distance, and it is reasonable to expect there to be some wear to it because of this use. I would have different expectations of it compared to a brand-new car. As with any car, there is an expectation there will be ongoing maintenance and upkeep costs. There are parts that will naturally wear over time, and it is reasonable to expect these to be replaced. With second- hand cars, it is more likely that parts will need to be replaced sooner or be worn faster than with a brand-new car. Oodle would not be responsible for anything that was due to normal wear and tear whilst in Mr C’s possession. However, given the age, mileage and price paid, I think it is fair to say that a reasonable person would not expect anything significant to be wrong shortly after it was acquired. I am aware that the hire purchase terms and conditions stat that: ‘‘If you have entered into this agreement mainly for business purposes: - you must inspect the vehicle and use your own skill and judgment to decide whether it conforms with its description, is of satisfactory quality and fit for your intended purpose; and - we will not be responsible for the quantity of the vehicle or whether it is fit for its intended purpose, or whether it matches any particular description or specification. We will however, procure for your benefit any manufacturer’s guarantee relating to the vehicle.’’ Therefore, it seems that the agreement is trying to exclude some of the implied terms by the SG(IT)A 1973 regarding the quality of the car. However, considering the Unfair Contract Terms Act 1977 (UCTA 1977) and the specific circumstances of this particular complaint, I do not think it would be fair and reasonable for Oodle to exclude the implied terms relating to the quality of the goods found in the SG(IT)A 1973. When coming to the above conclusion, I have considered that liability for breach of the obligations regarding the implied undertakings as to the quality or fitness, based on the UCTA 1977, cannot be excluded or restricted by reference to a contract term except in so far as the term satisfies the requirement of reasonableness. And, I think, the exclusion clause in the hire purchase agreement fails that requirement. The agreement Mr C entered was a standard form contract with no room for him to negotiate the aspects in question. As such, I

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think there was an imbalance in the bargaining power. As a taxi driver, or a delivery driver, Mr C is a small trader that does not have the same bargaining power as Oodle. Also, I do not think it is fair or reasonable that the clause in question excludes all liability for quality/fitness. The exclusion clause talks about ‘use your own skill and judgment’ but Mr C, as a taxi driver or a delivery driver, is not a qualified mechanic. As such, certain defects such an issue with the gearbox cannot be discovered by a visual inspection or a short test drive. For all the above reasons I do not think that Oodle should be able to rely on the exclusion clause in question. And even if I am wrong about the application and interpretation of the UCTA 1977, which I do not think I am, I still do not think it would be fair and reasonable for Oodle to rely on the exclusion clause. I say this for roughly the same reasons as above, mainly that there was a bargaining power imbalance between Mr C and Oodle, and I do not think it would be fair and reasonable for Oodle to complete excludes all liability regarding the quality/fitness of the car. As such I think it is fair and reasonable that SG(IT)A 1973 applies to this specific case. First, I considered if there were faults with the car. From the evidence on file, it is clear that the car needs a new gearbox. This has been confirmed by the independent inspection and diagnostics Mr C provided from two different garages. Based on that evidence, I think the car was, most likely, faulty. But just because a car was faulty does not automatically mean that it was of unsatisfactory quality when supplied. As such, I have considered if the car was of unsatisfactory quality when it was supplied to Mr C. Oodle said that the independent inspection determined that the fault was not present or developing at the point of sale. They said the car had travelled over 7,000 miles in about seven months as such they believe that if there was an issue with the gearbox at the point of sale, the car would not have covered that number of miles in the time that it had. I’ve taken the above into consideration, but I also considered Mr C’s testimony. He said that he was experiencing issues almost right after he picked up the car. Plus, I considered that it is also reasonable to take into account the nature of the problem and whether it is fair to say the car was reasonably durable. Considering the above, combined with the age and mileage of the car, I think that a reasonable person would not expect for the car to need a gearbox to be replaced and to have such a big expense so soon. Mr C only had the car for approximately seven months. I understand that an automatic gearbox should last for a lot longer than it has on a car that has been properly serviced and needing a gearbox to be replaced is a significant problem to arise, and it is very expensive to put right. I have also considered that the car in question was being advertised as having a full-service record, only a few months prior to supply. Therefore, taking all the circumstances of this specific complaint and given the age, mileage of the car, plus the price paid, I do not think this was a cost a reasonable person would expect to bear, or a fault that would be expected to arise in the time frame Mr C has had the car. Hence, I do not think the car was sufficiently durable. For this reason, I do not think the car was of satisfactory quality. Considering all of the above, under the SG(IT)A 1973 at this moment in time Mr C would be entitled to damages. However, I do not think damages would be a fair and reasonable option considering the specific circumstances of this case. As such, I considered what the right remedy is, taking all the circumstances of this case. I also take into consideration what both sides have said.

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I have considered that even if Oodle suggested a repair or a replacement of the car these, most likely, would not be practical remedies at this stage. I say this because we do not know if the repair would be economical, and it would cause further delays and burden to Mr C. As such, a repair seems unreasonable at this stage. In addition, I think most likely, it would not be easy to replace the car with a similar one as it might be difficult to find a like for like car. Plus, I think a monetary award, such as damages combined with allowing Mr C to keep the car, would also not be the most fair and reasonable. I say this because Mr C would need to look to repair the car, which would cause Mr C further inconvenience. Taking everything into consideration, I think the most fair and reasonable option at this point is for Oodle to end the finance agreement and to collect the car from wherever it is located at no cost to Mr C. Mr C has been able to use the car, so I think it is reasonable he pays for this use (as I explained above, I do not think it would be fair or reasonable for him to get all his payments back). As such, Oodle can keep all repayments made and due up until the car is collected but refund any made after the collection. Oodle should refund Mr C the £1,000 advance payment he made. Mr C paid for diagnostics so I think, upon proof of payment, it is fair and reasonable for Oodle to refund these costs, as he would not have incurred these had Oodle supplied him with a car that was of satisfactory quality and had the misrepresentation regarding being able to use the car for taxi purposes not been made to him. Oodle should also add interest to all the refunded amounts from the date of each payment made by Mr C until the date of settlement. Interest should be calculated at 8% simple per year. I have considered the impact the situation had on Mr C. I know this matter has caused him a lot of distress and inconvenience while trying to resolve it and being worried as to what he can and cannot use the car for. He also had to make the car available for inspections and diagnostics. Plus, he spent a lot of time corresponding when trying to sort out the situation he found himself in. I think Mr C would not have experienced all of this, had Oodle supplied him with a car that was of satisfactory quality and had misrepresentation not been made. As such I think Oodle should pay Mr C a total of £300 in compensation to reflect the impact this had on him. My provisional decision For the reasons given above, I intend to direct Oodle Financial Services Limited to: 1. End the finance agreement and collect the car from wherever it is located at no cost to Mr C; 2. Keep all repayments made up until the car is collected, but refund any made after collection; 3. Refund Mr C the £1,000 advance payment he made; 4. Refund Mr C the costs he incurred for the diagnostics, upon proof of payment; 5. Add 8% simple interest per year to all refunded amounts, from the date of each payment to the date of settlement; 6. Pay Mr C a total of £300 compensation for the distress and inconvenience caused;

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7. Remove any adverse information recorded on Mr C’s credit file in relation to this credit agreement. The credit agreement should be marked as settled in full on his credit file, or something similar, and should not show as voluntary termination. If Oodle Financial Services Limited considers that tax should be deducted from the interest element of my award, they should provide Mr C with a certificate showing how much they have taken off so he can reclaim that amount, if he is eligible to do so.’’ I have asked both parties to provide me with any additional comments or information they would like me to consider by 11 March 2026 and, later, extended this date until 18 March 2026. Following the provisional decision, Oodle replied to say that Mr C has around £2,065.12 in arrears due to missed payments. As such, I wrote to both parties to explain that I intend to say that, if Mr C accepts the final decision, I think it is fair and reasonable that Oodle still action all of the redress points above except with an amendment to point number 7 above. I think all the redress I intend to direct Oodle to pay should be applied first toward the arrears that Mr C owes them. Whatever arrears are left, after the redress is offset from the current arrears, Mr C will be responsible to repay these to Oodle. If Mr C is unable to repay this in one transaction, he can ask Oodle if an affordable repayment plan can be set up. Mr C should also be aware that if he fails to repay the remainder arrears, Oodle might have a right to record adverse information on his credit file. With the above in mind, I wrote that I intend to direct Oodle Financial Services Limited to: 1. End the finance agreement and collect the car from wherever it is located at no cost to Mr C; 2. Keep all repayments made up until the car is collected, but refund any made after collection; 3. Refund Mr C the £1,000 advance payment he made; 4. Refund Mr C the costs he incurred for the diagnostics, upon proof of payment; 5. Add 8% simple interest per year to all refunded amounts, from the date of each payment to the date of settlement; 6. Pay Mr C a total of £300 compensation for the distress and inconvenience caused; 7. Remove any adverse information recorded on Mr C’s credit file in relation to this credit agreement up to the point of car collection. Whatever arrears are left after the redress should be offset from the current arrears, and Mr C will be responsible for repaying these to Oodle. If Mr C is unable to repay this in one transaction, he can ask Oodle if an affordable repayment plan can be set up. Mr C should also be aware that, if he fails to repay the remainder arrears, Oodle might have a right to record adverse information on his credit file. If Oodle Financial Services Limited considers that tax should be deducted from the interest element of my award, they should provide Mr C with a certificate showing how much they have taken off so he can reclaim that amount, if he is eligible to do so. Oodle replied and requested copies of the call recording of the calls Mr C had with the broker, but have not provided any further information. Mr C responded and disagreed with the decision. I will address his points below. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable

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in the circumstances of this complaint. Following my provisional decision, Mr C said that he would like to challenge the fairness of being held liable for the arrears. He said that the breach of his consumer rights directly led to the car becoming unusable and, as a result, he did not get the use he wanted from the car. Mr C said that the car remained parked and unused for a significant period. He also said that he had experienced financial hardship because he is the sole provider for his family, and his inability to use the car for work has caused severe financial distress to him. As such, he feels that the arrears on the account are a direct result of the financial crisis Oodle forced him into. I have taken into consideration what Mr C has said but I still feel that the redress I proposed in my provisional decision and my follow up correspondence to both sides is fair and reasonable. Mr C covered a reasonable number of miles, so he gained a benefit from the car. I understand that now he has stopped using the car, but he had use of it for a long time and had done a reasonable number of miles. As such, I think the redress I proposed previously is a fair and reasonable way to resolve this complaint. All the redress should first be applied towards the arrears that Mr C owes Oodle. Whatever arrears are left after the redress is offset from the current arrears, Mr C will be responsible to repay to Oodle. If Mr C is unable to repay this in one transaction, he can ask Oodle if an affordable repayment plan can be set up. Mr C should also be aware that if he fails to repay the remainder arrears, Oodle might have a right to record adverse information on his credit file. My final decision For the reasons given above, and in my provisional decision, I direct Oodle Financial Services Limited to: 1. End the finance agreement and collect the car from wherever it is located at no cost to Mr C; 2. Keep all repayments made up until the car is collected, but refund any made after collection; 3. Refund Mr C the £1,000 advance payment he made; 4. Refund Mr C the costs he incurred for the diagnostics, upon proof of payment; 5. Add 8% simple interest per year to all refunded amounts, from the date of each payment to the date of settlement; 6. Pay Mr C a total of £300 compensation for the distress and inconvenience caused; 7. Remove any adverse information recorded on Mr C’s credit file in relation to this credit agreement up to the point of car collection. Whatever arrears are left after the redress should be offset from the current arrears, and Mr C will be responsible for repaying these to Oodle. If Mr C is unable to repay this in one transaction, he can ask Oodle if an affordable repayment plan can be set up. Mr C should also be aware that if he fails to repay the remainder arrears, Oodle might have a right to record adverse information on his credit file. If Oodle Financial Services Limited considers that tax should be deducted from the interest element of my award, they should provide Mr C with a certificate showing how much they have taken off so he can reclaim that amount, if he is eligible to do so. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 27 April 2026. Mike Kozbial

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Ombudsman

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