Mis-sold service plan

The consumer’s issue:

“I bought a five-year service plan as part of my used car purchase in August 2018. The business however, failed to inform me that the agreement had a 62,500 mileage limit, and prevented me from obtaining the benefit of the sixth service at the 75,000-mile mark. The inclusion of this service plan was a major factor in my decision to proceed with the purchase. I am therefore looking for the business to honour the terms of the service plan without reference to the mileage limit, or for them to provide me with compensation of £300. Furthermore, since I bought the car, I have moved address, meaning that the location of the business is no longer convenient for me to attend.”

The accredited business’ response:

  • In our response to the consumer, we explained that, while the service plan documentation clearly set out the mileage limit, it is possible that our sales executive failed to discuss this with the customer at the point of sale.
  • As we aren’t able to confirm that the consumer was actually provided with information about the mileage limit, we are prepared to complete the sixth service at our existing franchise location at no cost to the consumer.

The adjudication outcome:

  • The Motor Ombudsman adjudicator explained that, as the business was unable to show it had complied with its obligation under the Vehicle Sales Code i.e. to provide the service plan term to enable the consumer to make an informed decision about whether to proceed, this was treated as a breach of the Code of Practice.
  • As a result, two options were given to the business to resolve the matter. They were namely, to either provide the consumer with a written commitment that it will accept responsibility for the reasonable cost of servicing the car at any of the manufacturer’s franchise dealerships (to resolve the matter immediately), or to give the consumer a one-off payment of £300 in full and final settlement of the dispute.

Conclusion:

  • Both parties accepted the adjudicator’s conclusions and recommendation, and the business opted for an immediate payment of £300 to the consumer, thereby closing the case.