Tesla Ordered To Remove Cifas Marker & Pay £500 Compensation

A leading story on how the Financial Ombudsman agreed to set things right.

The decision in the case DRN-4326183 decided on 3 October 2023made by the Financial Ombudsman Service (FOS) to have a Cifas Marker removed and award compensation of 5% of payments made including £500 cash is an important one, as it signifies the power of the FOS to protect consumers’ financial well-being.

In this blog post, we will explore in more detail the case of Mr. E, and the reasons why the FOS decided to intervene and remove the Cifas Marker in his case.

The complaint of Mr. E involved a conditional sale agreement with Tesla Financial Services Limited, where he was supplied with a car that turned out to be of unsatisfactory quality.

Despite some minor issues at the beginning, Mr. E’s dissatisfaction grew when the car started experiencing more serious problems, including a grinding noise and a breakdown due to suspension failure. Mr. E’s request to reject the car and receive a replacement was denied by Tesla, who insisted on repairing the car.

However, the repairs were completed a year later and Mr. E was only offered £500 for the distress and inconvenience caused.

In this situation, Mr. E brought his complaint to the FOS for investigation, and the ombudsman agreed with the investigator’s assessment that the car was of unsatisfactory quality when it was supplied to Mr. E.

The ombudsman also concluded that the car was not sufficiently durable, and the failure of the suspension only 18 months after the purchase was not something that could reasonably be expected from a new car.

This decision was based on the Consumer Rights Act 2015, which states that goods should be of satisfactory quality when supplied and must conform to the contract within the first six months.

The ombudsman also took into consideration Mr. E’s request for a replacement car, based on a similar incident with a different company in the past. However, the ombudsman stated that the law changed in 2015 and now allows companies the chance to repair the goods before offering a replacement or refund.

In this case, the decision was made that Tesla acted reasonably by repairing the car and they were not obligated to offer a replacement.

Despite this, the ombudsman recognized that Mr. E was inconvenienced by the situation and that his enjoyment and usage of the car were notably impaired.

Therefore, the decision was made for Tesla to refund 5% of the payments made by Mr. E before the car was repaired, as a reflection of the impaired use caused by the car’s unsatisfactory quality.

In addition, Tesla was also directed to pay Mr. E £500 as compensation for the trouble and inconvenience caused by the faulty car.

The FOS also ordered Tesla to remove any adverse entries on Mr. E’s credit file, as well as apply 8% simple yearly interest on the refund, calculated from the date the payments were made.

This decision shows the FOS’s power to protect consumers’ financial rights and ensure that they are not unfairly affected by a company’s actions.

One of the main reasons why the FOS agreed to remove the Cifas Marker in this case is due to the recognition that Mr. E was not at fault in this situation. The Consumer Rights Act dictates that the supplier of goods is responsible for ensuring that they are of satisfactory quality, not the consumer.

In this case, Tesla failed to provide Mr. E with a reliable and durable car, and their actions caused inconvenience, distress, and financial loss to Mr. E.

Furthermore, the FOS has a duty to uphold fair and reasonable outcomes for consumers, and in this case, it was determined that it would be unjust for Mr. E to be marked as a fraud risk due to a dispute with a company that failed to fulfill their obligations.

The removal of the Cifas Marker was necessary to protect Mr. E’s financial reputation and to ensure that he is not unfairly penalized in the future.

In conclusion, the Financial Ombudsman Service’s decision to have the Cifas Marker removed in the case of Mr. E was based on the recognition of the consumer’s rights and the responsibility of companies to provide goods of satisfactory quality.

The decision also highlights the important role that the FOS plays in protecting consumers and ensuring fair and just outcomes in financial disputes.

This case serves as an example of the power of the FOS to intervene and correct unjust actions by companies, ultimately working towards a fair and transparent financial system for all individuals.