Car Finance company decision overturned by the Financial Services Ombudsman.

Establishing who bears the burden of proving the various aspects of a legal case is often more challenging than it appears; get it wrong and you could be asked to prove something you don’t have to or worse, something you can’t prove, like a negative.

This is at the centre of this case involving a BMW, which was returned to the supplying dealer on several occasions for repair over the course of ten months after sale. The finance company claimed the Retailer had not been able to replicate the fault, and as a result, there was no fault at that time to reject the vehicle.

The relevant facts

Ms P bought a BMW X4 for about £40,000 from a prestige car dealer by way of a Personal Contract Purchase (PCP) agreement with CA Auto Finance UK Ltd.

Having collected the BMW and on the way home, Ms P told the dealer about the suspension squeaking and she returned the car for inspection, but the dealer could not fault it.

A couple of months later, Ms P told the dealer that the car intermittently cut out, and when the engine was restarted, the transmission didn’t engage. The dealership inspected the car but again told Ms P they couldn’t replicate the symptoms, and no fault code was recorded.

Two months later, the car was returned for the same issues before, and this time a fault code – 8040A9 – was found and Ms P was told to ‘keep an eye on it’.

Two months later, the car was returned to the dealer again for the same problem, which this time, the dealer also experienced.

In December, ten months after delivery, the Car was sent to a BMW main dealer for the same reasons. This time, they found a fault with the SCR and catalytic converter, but still the problems persisted.

Now, a year after buying the X4, Ms P complained to CA Auto Finance, who said the retailer had not been able to replicate the fault and that, as a result, there was no fault at the time to reject the vehicle. This wasn’t true.

CA Auto Finance went on to say there was no evidence the car was faulty and that they must be satisfied that the cause of the current fault could not be attributed to how the vehicle had been maintained and handled while in the ownership of Ms P, or it was commensurate for a vehicle of the age and miles travelled. Her rejection request was not upheld.

Ms P had an expert inspection of the BMW, which concluded that something was not right with it and that the car had experienced the same problem off-and-on within a couple of months of sale.

Our Instructions

Stormcatcher were instructed to advise Ms P and to correspond with CA Auto Finance to explain in detail the relevant laws, the rules of evidence and the reasons why the final response was wrong.

CA Auto Finance confirmed receipt of our letter and said they would try to respond to our findings within four weeks. Because they didn’t reply, the matter was referred to the Financial Ombudsman.

The case

The X4 complaint centred around two issues: (1) whether the dealer not being able to replicate the problem and the absence of fault codes in the first six months was proof the BMW was not faulty and (2) whether Ms P had to prove the problem was not caused by her, in the way she drives the car, or through in service wear and tear.

Just because a fault code isn’t recorded doesn’t mean the vehicle doesn’t have a problem. Instead, it simply means the problem hasn’t been recorded by the ECU from a sensor.

Although it was claimed the vehicle could not be faulted, that was wrong. The BMW behaved in a way which was not expected or normal.

What CA Auto Finance did was impose an obligation for Ms P to prove a negative, by asking her to prove the problem wasn’t caused by her.

The rules of evidence place the burden of proving that the problem was caused by Ms P on CA Auto Finance.

Conclusion

Stormcatcher successfully argued Ms P’s case, and the FOS preliminary decision upheld Ms P’s complaint, concluding she did have the right to reject the BMW and the PCP should be unwound.

CA Auto Finance accepted the decision. If your car finance company has refused to accept your rejection complaint, and you are considering making a complaint to the FOS, contact Stormcatcher Law for advice on 0333 700 7676.