FOS updates on car finance commission complaints

FOS has published a blog on complaints about car finance commission. It is seeing an increase in complaints about the fairness of commission arrangements when customers took out a car finance agreement – often that the brokers did not tell the customer about the commission they would earn from arranging the finance. Other complaints include that the commission model was unfair, that the broker did not give impartial advice or that the broker did not get the best rate available for the customer. Most of the complaints are generated by CMCs.

FOS says there is quite a lot of variety and complexity across complaints, which will take it time to look through, but it’s likely there will be a variety of potential outcomes. It is urging firms to help by getting case files ready and is working with them to explain what it needs from them. It also says firms should provide meaningful and informative responses to customers when they first receive a complaint.

To help firms, FOS has issued some first views and provisional decisions, many of which are “non-uphold” views where brokers have, for example, received no commission at all or just a small fixed amount. But, where a “Different in Charge” model has been in place, FOS has seen instances of consumer detriment and would uphold complaints. It has also been engaging with CMCs to ensure that the complaints they forward are specific to the facts of the relevant complainant’s case.

Emma Radmore