\ud83d\udea8 So yesterday was an interesting (and busy) day for motor finance lenders and dealers. Firstly, the FCA decided to intervene into motor finance commission complaints. Secondly, two Ombudsman decisions were published on discretionary commission arrangements entered into before 28 January 2021.<\/p>\n\n\n\n
\ud83d\uddde\ufe0f So what happened?<\/p>\n\n\n\n
\u270d\ufe0f The FCA published a webpage about motor finance commission complaints<\/a> and a press release<\/a> too.<\/p>\n\n\n\n \u270bThe FCA has paused the 8 week deadline for responding to motor finance complaints where (a) there was a discretionary commission model in place for an agreement before 28 January 2021 and (b) the complaint was made on or after 17 November. This pause lasts until 25 September 2024.<\/p>\n\n\n\n \ud83e\udd14 The lack of any consultation means there are many unanswered questions. For example, what happens to letters of claim? Is there any impact on litigation cases? And what steps should firms take to investigate paused complaints (the Ombudsman has already been in touch on that!).<\/p>\n\n\n\n \ud83d\udd75\ufe0f The FCA is using its powers under Section 166. This means some firms will have a skilled person looking into their practices. We know from our clients that meetings are already being booked in today and on Monday.<\/p>\n\n\n\n \ud83e\udea7 But what has the Ombudsman done?<\/p>\n\n\n\n The Financial Ombudsman Service has issued two detailed decisions from an Ombudsman upholding complaints (and one which was not upheld). They both conclude that discretionary commission models are unfair and the customer should effectively only pay the interest at the rate at which the dealer would receive no commission.<\/p>\n\n\n\n There\u2019s much to say on this but some initial points:<\/p>\n\n\n\n (a) It hard to reconcile that guidance and a principle meant that firms should have done significantly more than CONC 4.5.3R required (either before or after the changes in 2021<\/p>\n\n\n\n (b) The approach bears very little resemblance to our experience of dealing with hundreds of similar claims before the Court.<\/p>\n\n\n\n (c) The proposal on redress takes no account of the complexity and reality of a customer\u2019s decision to get a car on finance.<\/p>\n\n\n\n \ud83d\udccb So, what next?<\/p>\n\n\n\n Given it\u2019s fashionable to do three point slogans then mine is: reflect on the developments, prepare for next steps (including, probably, more customer communications) and clearly decide and implement your strategy.<\/p>\n","protected":false},"excerpt":{"rendered":" \ud83d\udea8 So yesterday was an interesting (and busy) day for motor finance lenders and dealers. Firstly, the FCA decided to intervene into motor finance commission complaints. Secondly, two Ombudsman decisions were published on discretionary commission arrangements entered into before 28 January 2021. \ud83d\uddde\ufe0f So what happened? \u270d\ufe0f The FCA published a webpage about motor finance … <\/p>\n