If you've claimed against your car finance company under Section 75 and been rejected, the Financial Ombudsman Service (FOS) is your next step. Here's everything you need to know about using this powerful free service.
What Is the Financial Ombudsman Service?
The Financial Ombudsman Service (FOS) is an independent body that resolves complaints between consumers and financial services companies. It's free to use, entirely independent of finance companies, and its decisions are binding on the company (though not on you – if you disagree, you can still go to court). The FOS can award up to £430,000 (from April 2024) and covers HP, PCP, credit cards, and personal loans.
When to Use the Financial Ombudsman
The FOS can help with Section 75 claims rejected by the finance company, chargeback requests refused by your card provider, finance agreement mis-selling, voluntary termination disputes, poor complaint handling by the finance company, and unfair treatment during the claims process.
The FOS cannot help with complaints against the car dealer directly (dealers aren't regulated by the FCA – for those, try Trading Standards or small claims court), criminal matters, complaints already in court, issues with cash purchases where no finance was involved, or disputes over purely mechanical issues unless they're linked to a finance claim.
Before Going to FOS
FOS won't look at your case until you've made a formal complaint to the finance company and either they've given you a "final response" rejecting your complaint, or 8 weeks have passed since your complaint with no resolution. If 8 weeks pass without a resolution, you can go straight to FOS – you don't need to wait for their final response letter.
Time limits are important. You must refer your complaint to FOS within 6 months of the finance company's final response, or within 6 years from when the problem happened (or 3 years from when you became aware of it). Don't delay – missing these deadlines means losing your right to complain.
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How to Complain to FOS
Gather your documents first: your finance agreement, all correspondence with the finance company, their final response letter (if received), evidence of the car fault (inspection reports, photos, diagnostic reports), purchase documents, and a clear timeline of events.
Submit your complaint online at financial-ombudsman.org.uk/consumers/how-to-complain, by phone on 0800 023 4567 (free), or by post to Financial Ombudsman Service, Exchange Tower, London E14 9SR.
Explain your case clearly – state what happened (with a timeline), what you asked the finance company to do, what they said or did in response, why you think their decision was wrong, and what outcome you want. Provide all supporting evidence including the final response letter, your proof of the fault, and anything that demonstrates their decision was unfair or incorrect.
The FOS Process
The FOS first runs an initial assessment to check whether the complaint is within their jurisdiction, whether you've complained to the company first, and whether it's within time limits. If it's not eligible, they'll explain why.
If eligible, an adjudicator investigates by reviewing all evidence from both sides, contacting both parties for additional information if needed, and considering what's fair and reasonable in the circumstances. The adjudicator then issues an initial opinion setting out who they think is right, what remedy they propose, and their reasoning. Both parties can comment and provide further evidence at this stage.
If either party disagrees with the adjudicator's opinion, you can request an Ombudsman's final decision. This is binding on the company if you accept it – but if you reject it, you retain the right to take the matter to court instead.
What FOS Can Award
Financial awards include refund of payments made, compensation for distress and inconvenience (typically £100-£500, sometimes more for serious cases), costs you've incurred (hire cars, repairs, etc.), and interest on money owed – up to a maximum of £430,000. Non-financial remedies include ordering the company to unwind the finance agreement entirely, requiring them to correct credit file entries, and directing them to improve their processes.
What FOS Considers
FOS doesn't just apply strict law – they consider what's fair and reasonable in all the circumstances. They look at industry standards (how should a reasonable finance company have handled your claim?), the quality of your evidence (is your case well-documented with proof of the fault?), and the finance company's response (did they properly investigate and follow their own procedures?). This fairness-based approach means FOS can sometimes find in your favour even where the strict legal position is arguable.
Tips for Success
Be clear and concise – stick to the facts, explain why you think the company's decision was wrong, and don't waffle. Adjudicators handle hundreds of cases and appreciate clarity.
Provide strong evidence – your case is only as good as your documentation. An independent inspection report, clear records of the fault, a timeline of events, and all correspondence with the finance company form the foundation of a successful complaint. Explain the impact too – FOS considers distress and inconvenience, so describe how the situation affected you personally, the time and stress involved, and the financial impact.
Be realistic about what you're asking for – exaggerated claims undermine your credibility. And respond promptly to any requests from FOS for additional information – delays hurt your case and slow the process for everyone.
Common FOS Complaints About Car Finance
Section 75 Rejection
The finance company rejected your Section 75 claim for the faulty car. FOS will assess whether the rejection was fair.
Unfair Repair Insistence
You wanted to reject, they insisted on repair. FOS will consider whether this was reasonable.
Excessive Deductions
They accepted rejection but made unfair deductions from your refund. FOS can review what's reasonable.
Complaint Handling
They took too long, didn't respond properly, or handled your complaint poorly.
Commission Non-Disclosure
The dealer received commission they didn't tell you about. This may be a mis-selling claim.
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Sample FOS Complaint Summary
Complaint Summary for FOS
Finance Company: [Name] Agreement Number: [X] Vehicle: [Make/Model/Reg]
Timeline:
- [Date]: Bought car on PCP finance for £[X]
- [Date]: Discovered [fault]
- [Date]: Raised Section 75 claim with finance company
- [Date]: They rejected claim, stating [their reason]
- [Date]: I complained, providing [evidence]
- [Date]: Final response received – still rejected
Why I Think They're Wrong: [Explain clearly – e.g., "The car had a gearbox fault that made it unsatisfactory under the Consumer Rights Act. An independent inspection confirmed the fault was present at purchase. The finance company rejected my claim saying [X], but this is incorrect because [Y]."]
What I Want:
- Full refund of payments made: £[X]
- Termination of the finance agreement
- Credit file correction
- Compensation for distress and inconvenience: £[X]
Evidence Attached:
- Finance agreement
- Final response letter
- Independent inspection report
- All correspondence
- Photos/videos of fault
The Bottom Line
The Financial Ombudsman is a free, independent service with real power to resolve car finance disputes. Use it when your finance company rejects a legitimate claim – but remember to complain to the company first and give them 8 weeks or wait for their final response. Time limits apply (6 months from the final response), so don't delay. Decisions are binding on companies, strong documentation wins cases, and FOS considers fairness rather than just strict legal interpretation. For many buyers, the FOS is the most effective route to resolution when a finance company won't cooperate.
Finance company rejected your claim? Check if you qualify for our rejection service – we can guide you through the FOS process.
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