Return of non-refundable deposit

The consumer’s issue:

“I placed a £300 deposit on a 2007-plate hatchback. I thought it was just a holding payment  and that it would be refundable if I didn’t like the car. A few days later, I went to see the vehicle and found it had been mis-advertised. For example, the advert said it came with a heated windscreen and DAB radio when, actually, it didn’t have these features at all, plus the car had been previously written off.

Because I was unhappy with the vehicle, I asked for my deposit back. However, after a few phone calls, I was told by the business that the deposit was non-refundable, and that it said this on their website. However, I couldn’t see any mention of deposits being non-refundable if people change their mind.

I would therefore like the dealership to refund my £300 because they failed to inform me that they wouldn’t give me my deposit back if I didn’t like the car and, had I known this, I wouldn’t have paid them the money.”

The accredited business’ response:

  • There was no misleading information in the advert, and it clearly stated that the vehicle was a Category D write-off, which was also confirmed in a text conversation with the consumer.
  • We also did not say that the car came with heated seats.
  • The deposit was taken over the phone, and we would have told the consumer verbally that this was non-refundable.
  • Our receipts also confirm this, although we cannot find the one relating to this particular consumer.

The adjudication outcome:

  • The Motor Ombudsman adjudicator noted that when a consumer pays a deposit for a car, they are entitled to expect the vehicle to be of satisfactory quality, fit for purpose and as described.
  • From reviewing the advertising of the vehicle, the adjudicator felt that it was misleading and was likely to be misunderstood. This was because the front page of the advertisement failed to mention that the vehicle was a Category D write-off, and whilst these details were available on further investigation, it should have been made clear from the outset because it was material information that would affect a consumer’s purchasing decision.
  • They also noted that the advert said the car came with a heated windscreen and a DAB radio. However, the dealership had only said the car wasn’t advertised with heated seats, which was not an issue raised by the consumer.
  • They had not commented on the advert saying the car came with a heated windscreen and DAB radio so, on balance of probabilities, the adjudicator thought the car probably didn’t have these features, meaning the advert was misleading.
  • The adjudicator was also not satisfied by the evidence that the business had advised the consumer that the deposit was not refundable because there was no information to demonstrate that the customer was provided with this information at the point they placed the deposit.
  • As a result, the adjudicator upheld the complaint and awarded the consumer £300.
  • The accredited business disagreed with the outcome, so the complaint was referred to an ombudsman for a final decision.

The ombudsman’s final decision:

  • The ombudsman agreed with the outcome reached by the adjudicator for broadly the same reasons.
  • The front page of the advertisement did not show the vehicle as a Category D write-off. While this information was available upon further investigation, the ombudsman felt that these details were crucial to a consumer’s decision making and should have been made available on the front page of the advert. They concluded that this omission was likely to be misleading or lead to a misunderstanding of the car’s condition.
  • The customer had said the car did not have all the advertised features. The business had only commented on heated seats, which did not form part of the complaint.
  • No evidence about the heated windscreen and DAB radio was supplied, and the ombudsman felt that it was more likely than not that the car did not have the heated windscreen and DAB radio as advertised.
  • The business had argued that the consumer would have been informed over the phone that the deposit was non-refundable, but had not provided a call recording to verify this.
  • They had also only provided a generic deposit slip showing the terms and conditions, so there was no evidence to show the consumer had seen this.
  • The ombudsman also highlighted that it is a requirement that the terms and conditions are provided when requesting deposits. Having reviewed the advert, they could not see mention of a non-refundable deposit.
  • As a result, the ombudsman was not able to see evidence that the terms of the deposit were ever communicated to the consumer. They also felt that the customer was likely to have been misled by the advertisement of the car.
  •  The ombudsman therefore upheld the complaint, and said that the consumer should be refunded their £300 deposit.

Conclusion:

  • The consumer accepted the final decision, and the accredited business complied with the outcome. The case was therefore closed.