A third (34%) of drivers are unaware they may be entitled to compensation due to historic discretionary commission arrangements (DCAs), according to a new survey by direct-to-consumer online lender Carmoola.
Lloyds Banking Group, which owns Black Horse Motor Finance and Lex Autolease, has put another £700 million into its pot for potential compensation while it awaits the outcome of the car loan commission saga at the Supreme Court.
The Financial Conduct Authority (FCA) has announced an extension for firms to respond to complaints about motor finance agreements that do not involve discretionary commission arrangements (DCAs).
The Financial Conduct Authority has found "issues" in the ways that motor finance was offered or incentivised in the past and the ongoing review will determine the breadth of those issues, and what system of redress will be needed. That's according to FCA chief executive Nikhil Rathi.
The Financial Conduct Authority is reminding motor finance firms about their requirement to maintain adequate financial resources at all times, in the light of several lenders reserving millions of pounds in case of widespread compensation demands after the review of car loan commissions.
Two recent car loan misselling cases heard by the Financial Ombudsman Service (FOS) against Black Horse Motor Finance and Barclays Partner Finance have been mentioned by the FCA as particularly influencing its decision to dive deeper into this issue.
Historical arrangements used by motor finance firms to pay commission to car dealers and brokers are being reviewed by the Financial Conduct Authority in case consumers have not been treated fairly.
The Financial Conduct Authority expects to publish an update on its examination of motor finance next month.
Oodle Finance and Carsnip have teamed up to form a new partnership which guarantees car dealers commission payments from sales made via the online retail platform.
The Employment Tribunal has ruled that UK law can be rewritten to reflect commission in holiday pay - but has left car dealers with unresolved issues.
