The consumer’s issue:
“I purchased a used 17-plate compact sports car in October 2022, and I took out an extended warranty at the same time. Just a week after buying the vehicle, various warning lights illuminated on the dashboard. I contacted the warranty company to make a claim, but they refused to take this in any further, as they said that I needed to find a garage of my choice in order for a claim to be made.
I went to a business that specialised in my brand of vehicle and obtained a quote for the diagnostics. I tried to get approval from the warranty company, but the business told me that the garage should contact them directly to confirm what repairs are needed. It was found that a new wheel speed sensor was required.
The garage then advised me that the warranty company had approved the repairs, but were only querying their labour rate for the diagnostic which they kindly offered to reduce for me to £72.50 + VAT, to avoid the warranty provider not covering the entire cost of the repair. At this point, I was not advised by either the warranty provider or the garage that I would have to cover any shortfall once the work had been done.
Following the repair, I submitted the garage’s invoice for £393 to the warranty company, as advised by the workshop, and the warranty provider said that it would take up to 30 days to be reimbursed, which I thought was excessive. Even at this stage, there was no indication I wouldn’t be getting all of my money back.
It was only ten days after submitting the invoice that I received the first communication from the warranty company, where they said that they would only be paying £279 of the £393 – a shortfall of over £100, with no breakdown or reason given.
I do not believe I am responsible for paying this remaining amount, which is specifically due to poor / absent communications from the warranty provider. To resolve my complaint, I would like to be compensated for my financial loss, and also for my time having to go to the trouble of complaining and referring the matter to The Motor Ombudsman for such a minor amount.
I would also like the warranty provider to fully address the complaint I made, as they only commented about the labour costs. There was no reference made to the parts costs, plus there was lack of contact about them not approving the costs in full, and no sign of any apology.”
The accredited business’ response:
- We are sorry to hear that the consumer was disappointed with the amount reimbursed following their claim submitted to us.
- However, we only pay for labour in line with the manufacturer’s recommended repair times. It would appear the garage overcharged the customer on labour, as they quoted two hours to change the wheel sensor, where it should take only 0.2 hours. We therefore authorised one hour of labour as part of the claim, which was the maximum amount of labour that would be covered by the policy terms.
- The cost of parts within the claim was covered by us in full, and we will not be making any further reimbursement to the customer on this occasion.
The adjudication outcome:
- The adjudicator explained that, under the Vehicle Warranty Products Code, the warranty provider had an obligation to act in accordance with the terms of the warranty agreement.
- The adjudicator also stated that, as the complainant, the consumer had the evidential burden of showing that the warranty provider had failed to honour the warranty by not covering the labour cost in full.
- It was noted that, under the warranty agreement, the warranty provider was only responsible for covering repair costs when a covered component suffered a sudden and unexpected failure.
- In this case, the terms of the warranty stated that a maximum of one hour of labour would be covered.
- The adjudicator also acknowledged that the garage told the warranty company that the repair would only take 0.2 hours. Therefore this is what was approved.
- However, the work ended up taking two hours, which exceeded the maximum time limit of our hour defined under the policy terms.
- On this basis, the warranty provider was only responsible for covering a maximum of one hour instead of the full two hours that was being claimed for, meaning the case was not upheld in the consumer’s favour.
The consumer’s response:
- The consumer rejected the adjudicator’s findings, and said the root cause of their complaint was that the warranty provider did not inform them of any liabilities when the claim was being made.
- The customer said that they would have taken their vehicle to a cheaper garage if they had previously been aware of the cost that they would be responsible for.
- The customer maintained a desired resolution to have the full claim paid and compensation for inconvenience caused, and requested a final decision from an ombudsman.
The ombudsman’s final decision:
- The ombudsman reviewed the case in full, including the adjudication outcome, and explained the main dispute that needed to be considered was if the claim had been dealt with in the correct way.
- The ombudsman stated that the consumer believed that the warranty provider had breached the Vehicle Warranty Code, as they were not made aware of the claim limits.
- However, based on the documentation submitted, the ombudsman did not deem the consumer to have been treated unfairly, or that any elements of the Code had been breached. It was also determined that the claim amount had been calculated correctly.
- The ombudsman remarked that the warranty provider has been informed by the garage that the work would only take 0.2 hours, and so they authorised the repairs on this basis. Had the business been told the labour would be two hours from the beginning, then she would have expected them to communicate the limits to the customer.
- However, as they were not informed of the actual labour required as part of the work, they authorised the repairs as the labour and parts fell within the warranty’s terms and conditions i.e. a maximum of our hour of labour.
- Whilst the ombudsman understood that the consumer would be unhappy to be left paying for costs that they believed to be covered under his warranty, the ombudsman agreed with the warranty provider that the garage had misrepresented the labour cost, which is why the claim amount was reduced.
- On these grounds, the case was not upheld in the consumer’s favour at the final decision stage and, as a result, they were not entitled to any further award.
