Car finance commission claim

proctordaniel

Good evening all, I have just had an email back from hartwells my previous finance company, they have responded in less the 24 hours but if am honest am not sure what it means see below see what you can make of it thanks all.

We have checked our records and can confirm that a commission was paid to the dealer in respect of the introduction of you to us.  At the time this agreement was incepted there were no rules against the application of a discretionary commission model. While the FCA subsequently ruled against these, they were not applied retrospectively.

 

The FCA is now reviewing historical motor finance commission arrangements and sales practices so it is possible that this may result in a decision requiring us to respond.

Desmond_Hume

At this time, you’re getting nothing. That may change in the future. 

proctordaniel

thank you very much

sammyjammy

All you can do at this time is what you've done, register a complaint, now you wait until the FCA shares their findings and explains the way forward

fatbelly

Many firms are responding that they did not use DCAs. Your response clearly does not do that.

Sounds like Hartwells may be paying out in due course

https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/

facade

proctordaniel said:

Good evening all, I have just had an email back from hartwells my previous finance company, they have responded in less the 24 hours but if am honest am not sure what it means see below see what you can make of it thanks all.

We have checked our records and can confirm that a commission was paid to the dealer in respect of the introduction of you to us.  At the time this agreement was incepted there were no rules against the application of a discretionary commission model. While the FCA subsequently ruled against these, they were not applied retrospectively.

 

The FCA is now reviewing historical motor finance commission arrangements and sales practices so it is possible that this may result in a decision requiring us to respond.

Paragraph 1

The current hype is because some dealers were acting as brokers and were able to select different finance interest rates to offer to their customers, and received a higher commission for sealing the deal at a high rate (when the customer could have had the lower rate). This may have happened to you, certainly your dealer was paid a commision

This was not against any rules at the time and perfectly "normal".

The rules & regulations about finance changed and this is not allowed any more.

Now the FCA are trying to apply the rules retrospectively to these deals (even though they were allowed at the time, I suppose if they are "unfair" now, they were then....)

Paragraph 2

When the FCA sort out when compensation is required and how much is appropriate, the lenders will be forced to action it- so we will have to do something then.

So you just have to wait now that you have registered your claim and see what happens.

The most sensible (and therefore least likely...) compensation would be to repay the extra interest paid compared to the lower rate the customer could have got, but there is wild speculation about refunding all the payments made!

(Seems crazy- you'd have the car and all your money back!)

 

DullGreyGuy

It's more that the FCA later explicitly banned the practice, there is a question of if the conflict of interests was always a problem even if not explicitly banned. The FCA seems really keen on conflicts of interest over the last couple of years as have to help a few clients (insurers) identify the differing scenarios that generate CoI and how they manage them at the regulators request. 

At present its still IF compensation is required, their conclusion could be the practice was acceptable within the rules that applied at the time. 

Nasqueron

facade said:

proctordaniel said:

Good evening all, I have just had an email back from hartwells my previous finance company, they have responded in less the 24 hours but if am honest am not sure what it means see below see what you can make of it thanks all.

We have checked our records and can confirm that a commission was paid to the dealer in respect of the introduction of you to us.  At the time this agreement was incepted there were no rules against the application of a discretionary commission model. While the FCA subsequently ruled against these, they were not applied retrospectively.

 

The FCA is now reviewing historical motor finance commission arrangements and sales practices so it is possible that this may result in a decision requiring us to respond.

Paragraph 1

The current hype is because some dealers were acting as brokers and were able to select different finance interest rates to offer to their customers, and received a higher commission for sealing the deal at a high rate (when the customer could have had the lower rate). This may have happened to you, certainly your dealer was paid a commision

This was not against any rules at the time and perfectly "normal".

The rules & regulations about finance changed and this is not allowed any more.

Now the FCA are trying to apply the rules retrospectively to these deals (even though they were allowed at the time, I suppose if they are "unfair" now, they were then....)

Paragraph 2

When the FCA sort out when compensation is required and how much is appropriate, the lenders will be forced to action it- so we will have to do something then.

So you just have to wait now that you have registered your claim and see what happens.

The most sensible (and therefore least likely...) compensation would be to repay the extra interest paid compared to the lower rate the customer could have got, but there is wild speculation about refunding all the payments made!

(Seems crazy- you'd have the car and all your money back!)

 

There is an essentially zero chance of you getting your entire finance refunded as a result of this (though it's not beyond the realms of possibility they do something incredibly weird as their outcome like they did with PPI and suddenly deciding that new rules could be applied back to when they weren't in existence). It's not like say CPI which was largely useless so refunds were fine. If a customer qualified for 5% finance but the salesman out them on 7% for example, it's not like the person should have been paying 0% interest - they still had to pay interest, just less than they were charged.

Once the FCA is done, assuming they rule that repayment is necessary, it's to be expected they would tell the lenders to refund the higher rate of interest plus the 8% simple interest "compensation" that they normally apply. Some people might get thousands, some might get hundreds, probably most will get 0 as they weren't affected. MSE talk of billions being refunded like PPI is pure speculation without any founding