DCA - Ford Credit

[Deleted User]

I can post links now 🙌 ! 

As our review continues, firms should also: 

• Continue to investigate the complaints they receive involving a DCA.  This will help ensure firms are able to act promptly to resolve complaints if we decide the pause should be lifted and complaint handling should resume. Even if we decide that DCA complaints should be resolved through an alternative approach, it is highly likely that firms will need to take similar steps

[Deleted User]

https://www.financial-ombudsman.org.uk/news/update-car-finance-commission-complaints

[Deleted User]

However, while both the FCA review and court proceedings take place, we’ll continue to accept and investigate complaints as far as we can, to ensure that we:  

• have the information we need to decide the complaint as soon as it is appropriate to do so 
• can identify whether the complaint is likely to be affected by court proceedings
• can issue investigator provisional assessments, and ombudsman final decisions where appropriate, on cases that aren’t affected by the legal action.  

[Deleted User]

https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/credit-borrowing-money/car-finance/complaints-about-commission

DullGreyGuy

[Deleted User] said:

I can post links now 🙌 ! 

As our review continues, firms should also: 

• Continue to investigate the complaints they receive involving a DCA.  This will help ensure firms are able to act promptly to resolve complaints if we decide the pause should be lifted and complaint handling should resume. Even if we decide that DCA complaints should be resolved through an alternative approach, it is highly likely that firms will need to take similar steps

Investigate the complaints they receive... you said the FCA was actively encouraging to complain already so where is the link to that?

[Deleted User] said:

DCA is banned yes but commission as a whole is not. Fixed commission for the finance, head office bonuses and more?!? Hmm, still more to be done there. Volume commission can genuinely be larger than DCAs. Fixed commission is the type I think most would expect and accept. 

Commission overall will not be banned, ultimately the dealership are doing work on behalf of the finance company and will expect to be compensated for that. You dont hear about DHL or Yodel delivering parcels for free for John Lewis etc for exactly the same reason and there too the volume of business transacted impacts the bottom line. Simply in this case it's done as a commission rather than having a wholesale price which the dealership can then add a margin to. 

How are you proposing to fix it? X% on all cases? £500 on each sale? You'll still drive dealers to look at the finance firm offering them the best commission. 

[Deleted User]

I guess in hindsight yes, they are imploring lenders to keep investigating complaints as they will need to do a similar exercise anyway, but my wording on the consumer complaints is retracted, instead I would say neither the FCA or the FOS have ever said to stop. They have both said you can continue to complain and refer cases to FOS, but neither they nor the lender will have to give you an outcome before September. In the meantime FOS are working on claims in the background and the lenders should be too. What it doesn’t say is, lenders you don't need to any longer promptly acknowledge complaints or stop replying to DCA requests. The only change is an extension to the usual 8 weeks for a final response. In the meantime they can and should acknowledge claims, check for DCA and deal with any verification requests. What they will do instead is very little in order to slow things down after September then beg for more extensions 🙄  just my guess that

DullGreyGuy

I suspect the more accurate guess will prove to be the one that the FCA pushes back their finding until some time after September and with it extending the freeze on complaints.

With Barclay's having issued a judicial review I would be surprised if the FCA would make its decisions whilst that is still going through the legal process. Would be awkward to say the least if the FCA decides redress is required and the Court of Appeal subsequently confirms the arrangements were compliant with the laws in force at the time of the deal. 

[Deleted User]

Yes that seems likely too. Its an awkward pickle as we know these things can take a while especially if it goes all the way to the supreme court after. Combined with the appeals happening with court cases it’s a bit messy. The FCA will make no one happy waiting that long. Then they’ll pull another 50% tipping point nonsense out of their behind! No, hopefully they’ve learned from that. Imo CFS / BPF will not get anywhere with that review on their FOS decision. The FOS are (the actual Ombudsmen not the adjudicators) independent financial experts and the decision being contested around unfairness is based on court outcomes and the knock on likelihood a court would also find unfairness. I can see the redress being challenged effectively as it’s unrealistic. At a time when the courts are moving towards awarding the commission paid, it seemed bizarre the FOS went back to the difference in rate method. Courts have awarded that too but rarer and generally not recently. That switch back to commission refund could save a few pennies in the overall picture for lenders.