The High Court has found in favour of the Financial Ombudsman Service (FOS) in a review of its decision to uphold a complaint relating to a discretionary commission arrangement in a motor finance agreement.
The court found Barclays Partner Finance failed to meet standards, as motor finance commission disclosures were inadequate, making the borrower-lender relationship unfair. The FCA is reviewing the potential misconduct and impact of DCAs before their 2021 ban.
This decision provides important clarity for ongoing complaints, while the Supreme Court is set to hear related appeals for motor finance cases involving DCAs and non-DCAs, listed for the 1st April 2025.
In 2021 the Financial Conduct Authority banned discretionary commission arrangements (“DCAs”) because they were so unfair to consumers. This case was the latest attempt by motor finance lenders to shirk their responsibilities and deny any wrongdoing.
Coby continues. ”The court has unequivocally confirmed that the use of DCAs is unfair and the consumer was entitled to receive the compensation that she was awarded by the Ombudsman earlier this year. We call upon the Financial Conduct Authority to act swiftly in introducing rules which will hold lenders to account and result in fair compensation for the millions of affected consumers.”
Read the full FCA response to today’s decision here