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Explore opportunitiesThe FCA released a statement in relation to motor finance discretionary commission arrangements complaints and published two upheld decisions from the Financial Ombudsman Service (FOS), where the Ombudsman was in favour of the customer and awarded compensation, their finance provider had to pay. Knowing this will increase the volume of claims being submitted to the financial providers and the FOS. The FCA are pausing the complaints process. The FCA statement only relates to motor finance commission claims where the commission was paid under a discretionary commission arrangement and therefore does not affect affordability cases or other commission cases such as fixed commissions.
Normally the finance providers have around 8 weeks to respond to a complaint. The FCA has stated in their statement that the finance provider will not need to respond to the complaints until the end of September 2024. Therefore, allowing the finance provider around 9 months to provide a response should a complaint be logged today. Following a response from the finance provide, we normally have 6 months to refer the matter to the FOS should you not agree with the outcome. The FCA have also extended the 6 months’ time period to 15months.
This is where the finance provider afforded the credit broker/car dealership a discretion as to the interest rate charged in return for higher commissions. Each customer should have been made aware of this arrangement and given the opportunity to negotiate the interest rate. As per the FCA statement, and the Ombudsman’s decision published, customers can be compensated the difference between the interest rate they were charged and the interest rate they could have been charged. The regulator is concerned customers who took out PCP agreements before 2021 might have been overcharged.
Yes. Originally, we submitted a claim against your finance provider and not a complaint with a view to issue proceedings rather than submitting these cases to the Financial Ombudsman Service. Considering this this new information, we will be reviewing our cases and potentially looking to submit Letter of Complaints in order to maintain flexibility. As the “test” litigation relates to the same type of claim, we will look to explore both avenues to ensure we have the best possible outcome in relation to your case. We will continue to liaise with the finance providers and ask them to confirm whether the commissions were ‘discretionary commission arrangements’ or whether ‘fixed commissions were paid’ to help us progress your case. Is a claim and complaint not the same thing?
Currently we have not logged complaints in relation to these cases, however it is an avenue we are currently exploring. As soon as we have made a decision on how to proceed, we will notify you beforehand.
No. The pause relates to discretionary commission cases only.