Salary sacrifice car schemes – consumer rights warning

A_Geordie

Sullypants said:

The FOS can and does decide questions of eligibility and jurisdiction. DISP 2.7.3R is clear on who counts as an “eligible complainant” i.e. a consumer. The Ombudsman has to look at that threshold in order to even accept a complaint, so it’s absolutely within their remit

The thing is that it is not just DISP 2.7.3 which identifies eligible complainants, however you also need to consider DISP 2.7.6 which is that a complaint arises from a number of scenarios in order to be an eligible complainant. You are not and were never a customer of Arval (existing or potential) and none of the other conditions are relevant to you for the purposes of this issue. Therefore the FOS should not be taking on the case as it is outside their jurisdiction. 

Once the FOS review Arval's records, they should come to their senses and decline to take the complaint as being out of jurisdiction. I would be amazed if they decided otherwise and I wouldn't expect Arval to take that decision lying down either. I've seen the FOS do silly things but this would be outright stupid. 

I would repeat what I said previously in that you are barking up the wrong tree with Arval and your real complaint should be against your employer, but if you want to persist and take it to court with the potential of a costs order against you for a hopeless case, that's on you. If the FOS do take on the complaint, I would be interested to see the written reasons why. 

Sullypants said:

Also, after weeks of silence, my employer’s legal team suddenly got in touch today and advised “reviewing the case again.” Suggests the pressure is being felt. But make what you will of that.

I suspect the reason behind this is that in the Arval-employer contract, there will be a clause that says if an employee raises a dispute or complaint against Arval, the employer will be liable for those costs. No doubt Arval put them on notice and I'm sure you employer's legal team are now "reconsidering" in light of that, perhaps to avoid some expensive costs it will need to pay out to Arval, especially if they choose to get a barrister's opinion to defend this complaint (should it be accepted). 

Grumpy_chap

Sullypants said:

Thanks for your reply, you’ve clearly gone through the Miss R decision with a fine tooth comb. I agree with you that the Ombudsman’s decision in that case turned on the individual being the policyholder of the motor insurance. 
The FOS didn’t wash their hands of Miss R simply because her car was obtained via a salary sacrifice scheme.

You agree with me, but still seem to be missing the point, that FOS took the Miss R case because Miss R held a consumer / personal motor insurance policy to cover her genuine liability / risk in the event of an incident.  
That is a consumer contract.  
It is irrelevant / incidental that the risk covered happens to be a SS lease car and not a car on personal lease or owned by Miss R.
The complaint was upheld on the basis of the insurer under-performing against expected standards for a consumer contract.

Sullypants said:

• Financial Ombudsman Service - My complaint has been accepted. They’ve requested Arval’s records and it will move to investigation once an investigator is assigned.

• FCA - I’ve also raised a regulatory complaint. They’ve logged it, requested further information and passed it to their supervisory teams, mainly because Arval missed the 8 week DISP deadline and didn’t issue a compliant final response, also breach of Principles 6 & 7.

I really would not hang much weight on either of these.

FOS - They have received your compliant and issued a reference number.
They are neutral so, even if they see that this is not covered as a consumer matter, they may have process to make it the burden of the supplier to demonstrate that a case is not covered by consumer rules.  That takes the blame away from FOS and avoids FOS dismissing a case if they misunderstood the initial information.
I suspect Arval will respond very swiftly and curtly to say that this is a B2B contract and nothing to do with consumer.

FCA - Again, Arval will almost certainly say they never need to respond to the complaint and I suspect that FCA will agree once the evidence is provided by Arval.
Again, the regulator taking a neutral stance and placing the burden of demonstrating out of jurisdiction on the party against whom the complaint has been filed.

Sullypants said:

I have pulled my contract of employment and there is zero obligation to take a company car or lease vehicle. It is a voluntary non cash benefit, through salary sacrifice. Not core to my employment. 

Are you referring to "pulling out" your original contract of employment and onboarding pack?  That will not reflect the change of contract when you opted for the SS car.  That change may be a simple letter, but it will be a change none-the-less.  
The rules are very clear that opting for a SS scheme requires "changing the terms of your employee’s employment contract."  https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye
I would be absolutely amazed if the employer has not complied with this fairly basic requirement, particularly as you reference the employer having an in-house legal department.

Sullypants said:

my employer’s legal team suddenly got in touch today and advised “reviewing the case again.” Suggests the pressure is being felt. But make what you will of that.

That really might not be a good sign.
It could be that Arval have given indication of a potential claim against the employer.
Engaging the legal team is costing the employer money for activities that are not benefiting the business.
In the long term, it might result in your future option for SS car being reduced, or you being marked as an "awkward" employee.  
Ultimately, if the employer has to bear additional costs and legal actions which all detract from the efficient operation of the business, the outcome might be that the employer simply decides not to bother with SS cars going forwards.  To the detriment of the majority of employees.  It might not be just one case, but a small number of employees burdening the employer with additional costs resulting from the employer trying to do the right thing by their employees and offer flexible / tax efficient options really might just see the employer deciding the whole thing is really not worth it.

Jenni_D

Re. the "burdening the employer with additional costs" comment ... the employer's legal department will be salaried, so will already be a cost burden to the business. 🤷‍♀️