On the 10th January 2024, the Financial Ombudsman Service released a landmark ruling which found that car finance customer and Bott and Co Client, Mrs Young, had been unfairly treated by popular car finance provider Black Horse. This judgment has since opened the doors to millions of similar complaints against many different lenders.
Bott and Co took Mrs Young’s case to the Financial Ombudsman after discovering that Black Horse had been secretly paying commission to the car dealer which was directly linked to the interest rate she was charged. This meant that Mrs Young was overcharged for her car finance, along with potentially millions of other people having been affected by this type of mis-selling.
On the same day as the Mrs Young v Blackhorse decision, the Financial Ombudsman released two decisions simultaneously – the second being against Barclays for a complaint over car finance commission it paid in 2018. The deadline to appeal was the 11th April 2024 for both.
Whilst Black Horse have chosen not to appeal, on the 8th April 2024, it was reported that Barclays Bank was launching a judicial review of the Financial Ombudsman Service’s decision to uphold the complaint made against them. This has thrown into question the fate of complaints made prior to the FOC’s decision.
Following the ruling in January, out of fear of the possible deluge of car finance claims, the Financial Conduct Authority immediately introduced a pause on all new complaints being made to lenders. That fear was clearly well founded given that over 1 million people have subsequently lodged a complaint using Martin Lewis’ tool alone.
The Financial Ombudsman Service has been trawling through old cases at a glacial speed and lenders are still disputing any decisions in favour of the consumer. At the moment, it feels like lenders are being given an easy ride and it is the innocent consumers who ultimately suffer.
However, the pause currently doesn’t apply to the thousands of cases which were already being pursued using the Financial Ombudsman Service. So, what has become of those complaints? And what is likely to become of them now that Barclays have challenged this decision?
The Financial Conduct Authority reported that between 2019-2023, some 99% of complaints were being rejected by the lenders. So surely things have improved since the Ombudsman’s decision? And prior to Barclays appeal? Unfortunately not, say’s Bott and Co.
Remarkably there has not been a single further successful case to come from either the Ombudsman or the lenders.
Coby Benson, Solicitor at Bott and Co said: “The Financial Ombudsman Service has been trawling through old cases at a glacial speed and lenders are still disputing any decisions in favour of the consumer.
At the moment, it feels like lenders are being given an easy ride and it is the innocent consumers who ultimately suffer.”
The FOS just aren’t working through the pre-pause claims quick enough or being tough with the lenders. Malpractice has been identified on a colossal scale and a landmark ruling has been made yet the speed at which claims are being dealt with is allowing for the lenders to stall and affected consumers to wait for wrongs to be put right.”
Now, Barclays Bank has launched a judicial review of the Financial Ombudsman Service’s decision to uphold a complaint over car finance commission it paid in 2018.
The FOS ruled that Barclays “failed to act fairly and reasonably” in the case of a customer – known only as Miss L – who was not made aware that a loan agreement she entered into included a commission payment worth nearly £1,600.
The Judicial Review by Barclays was launched at the eleventh hour, just a day or two before the deadline was due to expire. This is just another example of lenders doing everything possible to frustrate the complaints process and delay things further.
Speaking of the review, Bott and Co’s Mr Benson said: “The Judicial Review by Barclays was launched at the eleventh hour, just a day or two before the deadline was due to expire. This is just another example of lenders doing everything possible to frustrate the complaints process and delay things further.
The lenders are well aware that there are time limits for bringing complaints. Every day that goes by sees another £3million* wiped off their potential exposure, as more and more complaints become time barred.”
*This is calculated based on a £16billion liability (reported here) spread over 14 years (2007 – 2021, as reported by the FCA here), i.e. £3m per day.
As it currently stands, despite legal rulings, both lenders and high street banks are stalling on their obligations towards the thousands of consumers who have been deceived by their unfair practices. These people now likely face further delays in finding out if they are due compensation for mis-sold car finance loans.
Regardless of where things currently stand, Bott and Co will continue to fight for the rights of consumers affected by these unfair practices and work tirelessly on their chances of redress.
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