Another victory, but the problem has still not gone away!

legal updates

The FOS confirmed in the article they had not yet published any final decisions on commission-related complaints.

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Joel Combes, Lawgistics’ MD featured in the Car Dealer Magazine article dated 3 May 2023 with the headline: Lawyers backing out of car finance mis-selling claims over fears they won’t win”. As with any publication, the headline is key to sparking your interest, but unfortunately, sometimes the details are overlooked.

The headline gave the impression that the mis-selling of motor finance issue is declining, and at the time of this article, we had seen a downturn in the number of solicitors’ letters that we were receiving. We even had a couple of court cases where the claimant’s solicitor had discontinued the claim.

Also, we had another client achieve a victory in court. A case was dismissed as the judge was happy that our client had provided all the necessary pre-contractual paperwork for the customer to read before signing the finance agreement, which included the statement: “We may receive a commission…”. The customer admitted they had failed to read the paperwork provided!

However, as if by magic, other solicitors have suddenly appeared out of nowhere, and we have received about 50 new letters relating to approximately 140 different consumers in the last two weeks!

These companies are clearly not going away and have a heavy presence on various social media channels. Also, in the Sunday Times last month, a full-page spread with the headline: Were you mis-sold car finance? was certainly going to add more fuel to the fire.

The Sunday Times article focussed on the Financial Ombudsman Service (FOS) receiving more complaints regarding the mis-selling of finance. From our point of view, this is correct as most of the solicitors and claims management companies are not having much success going through the court and therefore, advising the consumer to make a complaint to the FOS. The FOS confirmed in the article they had not yet published any final decisions on commission-related complaints about car finance loans, and they “will continue to look at each case on its own individual merits and circumstances.”

These types of articles are not particularly balanced as the quotes from the solicitors and claim management companies are quite clearly designed to promote their own agenda. No quotes from any motor dealers featured in the article!

Our advice is still to send the letters in and let Lawgistics deal with them. Also, if you have received a FOS complaint, make sure you forward it to us so we can advise you accordingly.

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John McDougallLegal AdvisorRead More by this author

Related Legal Updates

More of the same from the FCA

Dealing with discretionary commission arrangements and concern that customers are not getting a fair deal on GAP (Guaranteed Asset Protection) insurance products.

While We Wait: Preparing for the FCA’s Review on Motor Finance Commissions

As anticipated, the FCA was not particularly helpful when questioned about the various issues of investigating complaints that were outside of the standard retention periods for documentation.

FCA Commission Review: Separating fact from fiction in the wake of scaremongering

Attend a complimentary seminar hosted by the FCA for first-hand information – Scheduled for Wednesday, 24 January 2024.

The FOS reports over 10,000 motor finance complaints: Are we really surprised?

The good news currently is the FCA is focussing its attention on the lender and not our members.

The FCA means business

The FCA are closely monitoring how firms are putting their new rules in place and will take action against those that aren’t following them.

The Motor Ombudsman (TMO) – Is it “fit for purpose”?

It seems TMO never sought to ask that basic question and, by the time the penny finally dropped, the contract with the finance company had taken place more than six years ago

Financial promotion on social media

The FCA’s supervisory approach to financial promotions in social media was issued in 2015.

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