Volkswagen Financial Services (UK) Limited · DRN-6223984

The complaint Ms M is unhappy with how Volkswagen Financial Services (UK) Limited trading as Volkswagen Financial Services (‘VWFS’) dealt with the collection of a car they’d supplied to her under a hire agreement. What happened In June 2020, Ms M was supplied with a new car through a hire agreement with VWFS. She paid an advance payment of £709.34, and the agreement was for a minimum term of 48 months; with monthly rental payments of £236.45. In July 2024, after the agreement had come to an end, VWFS agreed a 12-month extension of the hire term. In July 2025, the extension ended, but VWFS made no contact with Ms M to arrange to collect the car. Ms M chased them about this in September and October 2025, but collection was never arranged. She also contacted the third-party collections agency that VWFS used, to try and arrange collection. But they advised her they didn’t have the authority to collect the car on behalf of VWFS. After taking legal advice, Ms M sent VWFS written notice under the Torts (Interference with Goods) Act 1977 (‘TIGA’), advising them that if the car wasn’t collected, she would dispose of it. VWFS failed to respond or collect the car, so Ms M disposed of it. She then advised VWFS what had happened and asked for a final settlement figure on the account. However, VWFS said they couldn’t provide this until the car was returned to them. Unhappy with what had happened, Ms M brought the matter to the Financial Ombudsman Service for investigation. VWFS then sent Ms M a default notice, as the car was no longer in her possession. Our investigator said that VWFS had between July and November 2025 to collect the car, and Ms M had made concerted efforts to arrange for the car to be collected. Ms M had obtained a different car in July 2025, so she was paying for two cars, and the investigator said the collection delays were entirely down to VWFS failing to act when and as they should. While the investigator said that Ms M had breached the terms of the agreement by disposing of the car, she kept VWFS fully advised as to what was happening, and what she intended to do. So, the investigator said that VWFS should provide Ms M with the requested liability figure, that they should refund the insurance payments she made with statutory interest, and that they should pay her an additional £400 to recognise the distress and inconvenience she’d been caused. Ms M didn’t agree with the investigator’s opinion as she didn’t think the £400 was sufficient to recognise what had happened. She said she had become an involuntary bailee under TIGA, so she shouldn’t be liable for the costs of the car following its disposal. VWFS responded to say the matter was with their legal team, and they didn’t agree that Ms M had the rights to dispose of the goods. They said that she should’ve returned the car to

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them at the end of the agreement, and that they are attempting to recover the car. However, VWFS agreed to repay the insurance costs Ms M had provided proof of, as well as paying her a total of £400 compensation. Given the responses from both parties, this matter has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’ve reached the same overall conclusions as the investigator, and for broadly the same reasons. If I haven’t commented on any specific point, it’s because I don’t believe it’s affected what I think is the right outcome. Where evidence has been incomplete or contradictory, I’ve reached my view on the balance of probabilities – what I think is most likely to have happened given the available evidence and wider circumstances. In considering this complaint I’ve had regard to the relevant law and regulations; any regulator’s rules, guidance and standards, codes of practice, and (if appropriate) what I consider was good industry practice at the time. Ms M was supplied with a car under a hire agreement. This is a regulated consumer credit agreement which means we’re able to investigate complaints about it. Before I explain why I’ve reached my decision, I think it’s extremely important for me to set out exactly what I’ve been able to consider here. I’ve reviewed TIGA, and this says someone becomes an involuntary bailee when they acquire adverse possession of goods belonging to someone else. TIGA requires the involuntary bailee to act reasonably, which includes trying to contact the owner to arrange collection. However, section 12 of TIGA gives the bailee the power of sale, under certain circumstances, and where proper notice has been given. The Financial Ombudsman Service is an informal alternative to the courts. As such, we are unable to make a determination on whether the correct notice has been given under TIGA, whether Ms M had the legal right of disposal, and what should happen with the proceeds of sale. So, while Ms M, having taken legal advice, believes she was entitled to dispose of the goods under section 12 of TIGA, and VWFS disagree with this, this is not something that will form part of my decision – it’s something only a court can decide. Ms M complained to VWFS on 8 October 2025, and they finally issued a response to this complaint on 13 March 2026. Within this response, VWFS confirmed “this situation went on for an unacceptable length of time … you were required to repeatedly contact us for updates [and] we failed to collect the car at the end of your extension period.” Within this response, VWFS also confirmed what payments Ms M had not paid, when letters were sent to her about this, and that they were looking to repossess the car. Given that VWFS have acknowledged their failings, and that this had an impact on Ms M, I’m satisfied that I don’t need to consider the merits of this issue within my decision. Instead, I’ll focus on what I think VWFS should do to put things right. Putting things right As I’ve said above, I’m not considering whether Ms M had the legal right under TIGA to dispose of the car, nor what, if anything, she owes VWFS as a result. It therefore follows that I also can’t consider the default and repossession of the car – whether Ms M acted reasonably, and whether VWFS are acting reasonably as a result of her actions, are all something best dealt with by the courts. And I would consider it reasonable if VWFS dealt

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with this matter before attempting to repossess a car they may not have the right to repossess. But I won’t be telling them they must do this as part of my decision. Instead, I’ve noted that Ms M asked VWFS to reimburse her insurance costs, providing evidence these totalled £211.80. While I may not usually have considered this refund as Ms M had a legal obligation to ensure the car remained insured, as VWFS have agreed to repay this amount to her, I see no reason why this refund shouldn’t now be paid. I also think Ms M should be compensated for the distress and inconvenience she’s been caused. But crucially, this compensation must be fair and reasonable to both parties, falling in line with our service’s approach to awards of this nature, which is set out clearly on our website and so, is publicly available. However, I need to take into consideration that I can only consider the impact of VWFS failing to collect the car had on Ms M. Any impact, and ongoing impact, relating to Ms M’s actions under TIGA can’t be considered, as, for the reasons stated, I’m not considering these actions themselves. It’s also the case that complaint handling isn’t a regulated activity, so I’m also unable to consider any impact arising from VWFS’s delay in responding to Ms M’s complaint. VWFS have offered to pay Ms M £400 to recognise the distress and inconvenience they’ve caused. When looking at this offer alongside what I can and can’t consider, I think it’s fair and reasonable in the circumstances, and it’s likely more than I would’ve directed had no offer already been put forward. So, this is a payment I’m directing VWFS to make Therefore, if they haven’t already, VWFS should: • refund the £211.80 insurance payments Ms M has paid; • apply 8% simple yearly interest on the refund, calculated from the date Ms M made the payment to the date of the refund†; • provide Ms M with the amount she’s liable for, at the earliest opportunity, and • pay Ms M an additional £400 to compensate her for the trouble and inconvenience caused by VWFS failing to arrange collection of the car (if this hasn’t already been paid, VWFS must pay this compensation within 28 days of the date on which we tell them Ms M accepts my final decision. If they pay later than this date, they must also pay 8% simple yearly interest on the compensation from the deadline date for settlement to the date of payment†). †If HM Revenue & Customs requires VWFS to take off tax from this interest, they must give Ms M a certificate showing how much tax they’ve taken off if she asks for one. My final decision For the reasons explained, I uphold Ms M’s complaint about Volkswagen Financial Services (UK) Limited trading as Volkswagen Financial Services. And they are to follow my directions above. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms M to accept or reject my decision before 14 April 2026. Andrew Burford Ombudsman

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