FOS gives guidance on motor finance complaints

Following its consultation on its plan and budget for 2024/25 (which closes on 30 January), FOS has reiterated its expectation that complaints to it will increase in the next financial year. It has identified a number of drivers for this, not least cost of living pressures leading to a rise in irresponsible and unaffordable lending complaints, and a rise in disputed transactions as fraud and scams increase. FOS wants to resolve 90% of cases within 5 months to help consumers and businesses get answers as quickly as possible, while aiming to help the industry by the proposed reduction to its case fees and levies.

The latest Ombudsman News summaries the budget proposals as well as giving information for both consumers and businesses on FCA’s policy statement on the car finance market. For businesses, FOS stresses that it expects firms that receive complaints to make clear to complainants whether the temporary complaint handling rules apply to the complaint. It reminds firms that the temporary rules apply to complaints where:

  • a consumer bought a car using finance before 28 January 2021
  • the lender and car dealer had a discretionary commission arrangement for the dealer’s commission acting as credit broker
  • and the consumer either made a complaint to the dealer or lender between 17 November 2023 and 25 September 2024 or received a final response between 12 July 2023 and 20 November 2024.

It reminds firms also that the new temporary rules will not apply to complaints relating to finance arrangements after 28 January 2021 or cars bought under hire agreements. It also says that if the complaint relates to a situation where there was a DCM in place, but relates to a different issue, firms should continue to investigate as normal.

Emma Radmore