If you’ve ever driven away in a car on finance, only to later realise the deal wasn’t as transparent as it should have been, you’re not alone. Thousands of UK drivers have discovered they were mis-sold car finance—whether through hidden fees, misleading terms, or unaffordable repayment plans. If this sounds familiar, you may be wondering where to turn for help.
This is where the Financial Ombudsman Service (FOS) comes in. As an independent body designed to settle disputes between consumers and financial businesses, the FOS plays a crucial role in helping people reclaim what’s rightfully theirs. But what exactly does the Financial Ombudsman do? And how can it support you in making a mis-sold car finance claim?
Let’s break it down in a way that’s clear, informative, and, most importantly, useful for anyone seeking financial justice.
Understanding the Financial Ombudsman’s Role
The Financial Ombudsman Service was set up to resolve disputes fairly and impartially, without the need for court action. It acts as a bridge between consumers and financial institutions, ensuring companies are held accountable for poor practices.
When it comes to mis-sold car finance, the Ombudsman can step in if a lender, broker, or dealership has failed to act responsibly. If you’ve raised a complaint with your finance provider but haven’t received a satisfactory response, the FOS is your next port of call.
They’ll assess whether the agreement was fair, whether the lender explained everything properly, and whether you were treated in line with Financial Conduct Authority (FCA) regulations. If they find that you were misled or treated unfairly, they can order the lender to put things right—often by refunding money or adjusting the terms of your finance deal.
Common Reasons for Mis-Sold Car Finance Claims
Mis-selling comes in different forms, and many people don’t even realise they’ve been affected until months—or even years—down the line. Some of the most common reasons people bring car finance complaints to the Ombudsman include:
- Undisclosed commission – Many dealers and brokers received commissions from lenders for selling specific finance packages, but they didn’t always tell customers about it. If this influenced the deal you were given, you may have grounds for a claim.
- Misleading affordability checks – Finance companies are required to ensure you can afford repayments before approving your loan. If they didn’t check properly and you were given an unaffordable deal, it could be classed as mis-selling.
- Lack of transparency – Were you given all the details about interest rates, fees, or balloon payments before signing? If key information was missing or unclear, you might not have agreed to the deal had you known the full picture.
- Unfair contract terms – Some agreements include hidden charges, restrictive clauses, or unfair early repayment penalties. These can make it difficult to manage the loan fairly.
- Being pressured into a deal – If you felt rushed or misled into taking out finance when it wasn’t the best option for you, that’s also a red flag.
If any of these situations sound familiar, you’re not alone—and the Financial Ombudsman could be your best route to securing compensation.
How to Take a Mis-Sold Car Finance Complaint to the Ombudsman
The process of bringing a claim to the Financial Ombudsman Service isn’t complicated, but it does require patience and proper documentation. Here’s what you need to do:
- Raise a Complaint with Your Finance Provider First
- Before the Ombudsman can step in, you need to give your finance provider a chance to resolve the issue. Write to them, explaining why you believe the finance was mis-sold and requesting a resolution. They have eight weeks to respond.
- Escalate to the Ombudsman If You’re Not Satisfied
- If the finance company rejects your complaint or doesn’t respond within eight weeks, you can escalate it to the Financial Ombudsman Service. This can be done online, over the phone, or by post.
- Provide Evidence to Support Your Claim
- The more proof you have, the better. Gather copies of your finance agreement, emails or letters from the lender, proof of payments, and any other documents that support your case.
- Wait for the Ombudsman’s Decision
- Once the Ombudsman reviews your complaint, they’ll issue a decision. If they find in your favour, they can order the lender to refund money, amend the finance terms, or take other corrective action.
This process can take a few months, but if your claim is successful, the outcome could be well worth the wait.
Why the Financial Ombudsman Matters
For many people, fighting a financial institution can feel intimidating. After all, these companies have teams of lawyers and well-established policies designed to protect their interests.
That’s why the Financial Ombudsman Service is so important—it levels the playing field. Unlike the courts, the Ombudsman is free to use and doesn’t require legal expertise, making it an accessible and fair option for consumers seeking justice.
The FCA’s rules state that lenders and brokers must act in the best interests of their customers. If they fail to do so, the Ombudsman ensures they’re held accountable. This has led to thousands of UK consumers successfully reclaiming money on mis-sold car finance deals.
What to Expect in a Successful Claim
If the Ombudsman rules in your favour, the outcome will depend on how the mis-selling affected you. Some possible resolutions include:
- A full or partial refund of interest and fees
- Cancellation or adjustment of an unfair finance agreement
- Compensation for financial losses caused by the mis-selling
- Removal of unfair contract terms that made repayment difficult
Each case is unique, so the Ombudsman will look at the details before deciding on an appropriate resolution.
How to Strengthen Your Claim
If you’re considering making a complaint, here are a few ways to boost your chances of success:
- Be clear about what went wrong – Whether it’s hidden commissions, unfair charges, or affordability issues, explain why you believe the finance was mis-sold.
- Provide as much evidence as possible – Contracts, statements, emails, and phone records can all support your case.
- Act quickly – The Financial Ombudsman Service can investigate complaints up to six years after the agreement was made—or three years from when you first noticed the issue. The sooner you act, the better.
The Bigger Picture – Holding Finance Providers Accountable
The rise in mis-sold car finance complaints isn’t just about individual cases—it’s about making the entire system fairer. The FCA has been cracking down on unethical finance practices, and consumer complaints play a vital role in driving change.
By challenging unfair agreements, customers are sending a clear message: transparency and fairness are non-negotiable. If more people come forward, lenders and brokers will have no choice but to clean up their act.
Conclusion
If you believe you’ve been mis-sold car finance, you don’t have to suffer in silence. The Financial Ombudsman Service is there to help, providing a fair and accessible way to challenge dodgy finance deals and reclaim money that’s rightfully yours.
While the process requires patience, the potential outcome—a refund, a fairer finance agreement, or even compensation—makes it well worth pursuing.
At ReclaimingCarFinance.co.uk, we understand how confusing and frustrating mis-sold car finance can be. That’s why we’re here to help guide you through the process and ensure you get the justice you deserve. If you’re unsure where to start, we’re ready to assist—because no one should be left paying for a deal they were misled into.
