In 2021, the Financial Conduct Authority Eliminated Discretionary Commission Models to Prevent Broker-Driven Interest Rate Hikes in Motor Finance, Mandating Firms to Amend Detrimental Procedures.
Today a full investigation has been opened on the following basis:
"There have been a high number of complaints from customers to motor finance firms claiming compensation for commission arrangements prior to the ban.
Firms are rejecting most complaints because they consider that they have not acted unfairly nor caused their customers loss based on the applicable legal and regulatory requirements.
The Financial Ombudsman Service has considered some complaints rejected by firms. It found in favour of complainants in two recent decisions [see here and here]. This is likely to prompt a significant increase in complaints from consumers to firms and the Financial Ombudsman.
Claims have also been brought in the County Courts, some of which have been upheld. So, there is significant dispute between some firms and consumers on whether firms have breached legal and regulatory requirements.
Consequently, we are using our powers under s166 of the Financial Services and Markets Act 2000, to review historical motor finance commission arrangements and sales across several firms.
If we find there has been widespread misconduct and that consumers have lost out, we will identify how best to make sure people who are owed compensation receive an appropriate settlement in an orderly, consistent and efficient way and, if necessary, resolve any contested legal issues of general importance.
In the meantime, we are pausing the 8-week deadline for motor finance firms to provide a final response to relevant customer complaints.
The pause will apply to complaints about motor finance agreements where there was a discretionary commission arrangement between the lender and the broker and will last for 37 weeks (approximately 9 months).
We are introducing the pause without consultation from today. This is to prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while we assess the issue and determine the best way forward. In deciding next steps, we will be informed by our statutory objectives to protect consumers, ensure market integrity and promote competition in the interests of consumers.
It is particularly important to manage these risks because, in line with most types of consumer credit, motor finance is not protected by the Financial Services Compensation Scheme.
This pause will apply to complaints received by firms on or after 17 November 2023 and on or before 25 September 2024.
For example, if a firm had been dealing with a complaint for 3 weeks at 11 January 2024, the time limit for responding to the complaint would be paused for 37 weeks until 25 September 2024. When the pause ends, the firm would have the remaining 5 weeks to provide its final response. If a complaint is received during the 37-week period, the 8-week deadline will expire on 20 November 2024.
The 37-week period will enable us to analyse the issues and decide what, if any, further action including legal steps are necessary. We may need to extend the pause if more time is required to make sure complaints are dealt with properly and consumers who might be owed compensation receive it.
Consumers will also have up to 15 months to refer their complaint to the Financial Ombudsman, rather than the usual 6 months. This extension applies to complaints where the firm had sent a final response in the period beginning with 12 July 2023 and ending with 10 January 2024, or where the firm sends a final response during the period beginning with 11 January 2024 and ending with 20 November 2024.
Consumers can find out more about how this affects them.
We plan to set out next steps on this issue in Q3 2024."
For further information please contact:
Sonia Mattis or Kevin Stewart at firstname.lastname@example.org
Keep up-to-date with CarsVansandBikes.com on Twitter; @Carsvansbikes
or follow us on Linkedin: www.linkedin.com/company/carsvansandbikes
CarsVansandBikes.com: Revolutionizing Vehicle Advertising in the Digital Age
In the ever-evolving digital landscape, the quest for the perfect vehicle - be it a car, van, or motorbike - has been transformed by the emergence of CarsVansandBikes.com. Launched in 2021, this digital advertising website has rapidly become the go-to platform for motorists seeking new or pre-owned vehicles. Embodying the ethos As easy as CVB, the platform simplifies the search process, making it more accessible and user-friendly.
What sets CarsVansandBikes.com apart in the crowded online marketplace is its commitment to unbiased advertising. In a marked departure from industry norms, CVB eschews advertising or sponsored listings. This principled stance ensures that all vehicles are presented on CarsVansandBikes.com without any undue influence or bias, offering a refreshingly transparent experience for users. This approach starkly contrasts with other platforms where sponsored listings can often skew visibility and influence consumer choice.
The fair and transparent cataloging of advertising stock on CarsVansandBikes.com is another cornerstone of its service. By providing comprehensive details of each vehicle, beyond just listing prices, the platform empowers motorists to make well-informed decisions. This depth of information is crucial in an industry where the nuances of each vehicle can significantly impact buyer satisfaction.
A standout feature of CarsVansandBikes.com is its pricing model. When it first graced the online automotive advertising scene, CVB distinguished itself by not charging extra fees. In a bold move for 2024, the platform has further elevated its commitment to affordability. Now, neither motor dealers nor private motorists are required to pay to advertise their vehicles on the site. This initiative is a significant stride in democratizing vehicle advertising, allowing sellers of all scales to reach potential customers without financial barriers.
The platform's ethos of connecting sellers directly with potential buyers is a testament to its user-centric design. CarsVansandBikes.com goes beyond mere transactional interactions, fostering a community where detailed vehicle information is readily available. This approach not only aids in the selling process but also ensures that buyers are better equipped to make choices that align with their needs and expectations.
Operating under the trade name CarsVansandBikes.com, CarsVansandBikes Limited has positioned itself as a trailblazer in the automotive advertising industry. By offering its services completely free of charge, the platform breaks down traditional barriers, making vehicle advertising more accessible and equitable.
As CarsVansandBikes.com continues to grow and evolve, its impact on the automotive market is undeniable. With its user-friendly interface, commitment to unbiased advertising, and innovative approach to cost, CVB is not just a platform; it's a paradigm shift in how we find and advertise vehicles in the digital age.