Volkswagen Financial Services (UK) Limited · DRN-6236502

The complaint Mr H says Volkswagen Financial Services (UK) Limited (VWFS), trading as Porsche Financial Services, were unreasonable to default his finance agreement. What happened The detailed background to this complaint is well known to both parties. So, I’ll only provide a brief overview of some of the key events here. Mr H entered into a regulated hire purchase agreement with VWFS. The agreement fell into arrears and VWFS issued a default notice requiring payment of arrears by the 15 February 2025. Mr H says he did not receive that default notice. He disputed service and pointed out that VWFS had been unable to provide proof of posting or delivery. VWFS provided a copy of the default notice and records showing subsequent contact attempts, including telephone calls and emails between January and May 2025, and a further letter in May 2025. They terminated the agreement on the 28 May 2025, and the balance accelerated to £45,724.50. Our investigator concluded that VWFS took reasonable steps to send the default notice and made reasonable efforts to engage Mr H before termination and therefore did not act unfairly. Mr H disagreed. He said the correct legal test was whether the default notice was served not whether it was reasonably sent. He also said subsequent contact could not remedy a failure to serve a compliant default notice and that VWFS acted unfairly in refusing reinstatement when he offered to clear the arrears. Mr H asked for a decision by an ombudsman. 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. I agree with the investigator’s view of this complaint, for broadly the same reasons. Where the information I’ve got is incomplete, unclear, or contradictory, as some of it is here, I have to base my decision on the balance of probabilities. I’ve read and considered the whole file, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on any specific point, it’s not because I’ve failed to take it on board and think about it but because I don’t think I need to comment on it in order to reach what I think is the right outcome. Sections 87-88 of the Consumer Credit Act 1974 require a compliant default notice to be served before a lender can terminate an agreement or demand early repayment. That is a strict statutory gateway. However, in practice, neither the Act nor case law requires a firm to prove actual receipt by the consumer in every case. It is generally sufficient for a firm to

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show that the notice was properly addressed and sent by an appropriate method, unless there is persuasive evidence that it was not delivered. Here VWFS has provided a copy of the default notice and evidence that it was addressed correctly. I've seen no indication that the address used was incorrect or that correspondence sent to that address was routinely failing. While VWFS cannot provide proof of posting, that is not uncommon in bulk mail processes and does not in itself mean that notice was not sent. Mr H says he did not receive the notice. I do not doubt his account, but non-receipt alone is not enough to conclude the notice was not served, particularly where the firm has shown it followed its usual process and used the correct address. I've also taken into account the wider pattern of contact. VWFS attempted to engage Mr H multiple times by telephone and e-mail over several months. There is also evidence that Mr H was aware of the arrears position and that discussions about repayment arrangements took place. In those circumstances, I think it is more likely than not that Mr H was aware, or ought reasonably to have been aware, that his account was in arrears and at risk of termination. I accept Mr H's point that subsequent contact cannot replace a default notice. But in this case, I am satisfied on balance that a default notice was issued in line with VWFS’s normal processes, and that the statutory requirements were met. Mr H says he offered to clear the arrears and that VWFS acted unfairly in refusing. However, by the point of termination, VWFS had made repeated attempts to agree an arrangement and had received no sustained engagement. In those circumstances, I don't find it unreasonable that it preceded to terminate and require payment of the full balance. I've also considered Mr H’s ‘protected goods’ argument. While more than one third of the total amount payable had been paid which limits repossession rights without a court order, it does not prevent termination of the agreement or acceleration of the balance following a valid default notice. I haven't seen evidence that VWFS acted outside those constraints. Taking everything into account, I'm satisfied that VWFS acted in line with its contractual and statutory rights and did not treat Mr H unfairly. My final decision For the reasons I’ve given above, I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr H to accept or reject my decision before 20 April 2026. Phillip McMahon Ombudsman

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