So, originally going to be £950. But then the lawyer bashing. I assume that lawyers would take say a third of the £950. Hey presto. Scheme now pays the figure net of the lawyers slice. The issue of using it with a lawyer means you get even less. The quandary though is what could you have won back - would it be a lot more or not? Perhaps the scheme could include an obligation to show a “best case” to the consumer before they are bound to accept £700.
Having some experience with these mass claims from years ago (anyone remember the RTB "scandal") I've been following this saga with interest.
I'm still waiting for an explanation of what "harm" a bog standard commission payment caused.
Like I can understand the issue where the broker set the APR. Thats a conflict of interest. I can also understand it's wrong to tell a punter you are "checking the market" when you were tied to a bank like in First Rand.
However if the commission didn't impact what the customer paid then what did it matter? You either accept the price or you don't.
"FCA chief executive, said: ‘We recognise that there will be a wide range of views on the scheme, its scope, timeframe and how compensation is calculated. On such a complex issue, not everyone will get everything they would like. But we want to work together on the best possible scheme and draw a line under this issue quickly. That certainty is vital, so a trusted motor finance market can continue to serve millions of families every year.’"
Which translates to, we don't really care about the consumer and would rather not be troubled by this issue anymore. Not everyone (nobody) will get want the want (should) but it is more important to protect the motor finance industry so let's dish a bit of money out and put it behind us swiftly. Nothing to see hear or learn from.
"To learn that they were ripped off with secret commissions including commissions "
They weren't secret. There was disclosure in the contracts. That someone just bought at the offer price without e.g. checking with a bank or Zopa or whatever is their problem. FCA blundered into this in 2021 when there was no need and is now trying to regain some face with a farcical scheme that goes way beyond what the SC said was required. Meanwhile banks can lose £12,000,000,000 off the balance sheet and the FCA whistles.
Did David Lewis below read the cases on appeal? Dealers in many cases do not make "a few bob" (and if they did, no harm in disclosing this), they made "a ****ton of bob" and were in many cases incentivised to make the maximum possible upcharge (having carefully weighed the buyer's wallet and credulity with the expertise that only years of sharp practice / outright dishonesty can bring). And yes, if I looked at a finance arrangement and realised the dealer was taking 50% (etc) of a substantial interest charge for itself, I would refuse the finance. Which is why these relationships and their terms were concealed by the industry.
I'm astonished at the negative comments on here. Those responsible for them might enjoy a comfortable lifestyle; many consumers will not. To learn that they were ripped off with secret commissions including commissions that varied depending on the interest rate obtained will be deeply concerning to many. The same reasons explain why solicitors are not permitted to make secret profits. To suggest that honesty, openness and transparency aren't important when making a major purchase is truly bizarre.
Given the way the "unfair relationship" provisions of section 140A of the Consumer Credit Act are drafted, there was some justification for the Supreme Court finding an implication of unfair overcharging in the finance company being able to pay 55% of its charges as dealer commission. However, against a backdrop finding that, apart from that sort of exceptional case, lenders and dealers were free to agree what commissions should be paid without the agreement of the customer, the FCA setting the compensation tripwire at 35% of charges seems too low a threshold.
Paul - this is about car finance, not the diesel emissions issue. I had a car on finance in this period - I agreed the deal and, frankly, I was not interested in who got what commission - the arrangement worked for me so I will not complain. I do wonder in these cases, though, whether the real profits are for the solicitors running the claims, rather than the "victims".
Personally, I was expecting the CEOs of Volkswagen to rock up outside my house with a gold bar even though I have never had Motor Finance, so I am deeply and sincerely disappointed by the fact that yet another one of these ghastly claims management bonanzas has proved to be a damp squib.
"Bought a car on finance since 2007? You could be one of the millions owed thousands. Check for free using our agreement finder, if you could claim for mis-sold car finance compensation."
Something needs to be done about this nonsense. It is obvious that these claims are feathering the nest of claims management companies and to a lesser extent the legal firms that dwell in their nether parts.
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