Treasury intervention in car commissions scandal

NewportPaul23

It appears the Treasury has intervened to back Santander and Lloyds against the car commission disclosure scandal . This appears to be completely against protecting consumers. This seems like poking a nose in to protect the big boys rather than us little guys ? Anyone else seen this? 

TadleyBaggie

NewportPaul23 said:

Anyone else seen this? 

Yes we all saw it yesterday.

https://forums.moneysavingexpert.com/discussion/6581982/rachel-reeves-intervenes-in-uk-car-finance-mis-selling-case-to-protect-lenders#latest

dunstonh

It appears the Treasury has intervened to back Santander and Lloyds against the car commission disclosure scandal .

a) there is no scandal.
b) we knew the treasury was involved last year. We now know that the Treasury is intervening
c) the intervention is logical as many believe the lower courts interpretation are wrong and certainly against the intention of the law.

This appears to be completely against protecting consumers.

Not at all.     It would certainly end a freebie handout but it would increase the cost of buying cars and it would like into things like home insurance and other areas as well.  

The consumer is better off through this intervention (assuming the Supreme Court accepts it).

. This seems like poking a nose in to protect the big boys rather than us little guys ?

Who are the little guys you are referring to?  - greedy freeloaders hoping to get a payout despite not being missold?
Or the claims companies who are seeing another golden goose die right in front of them?

Anyone else seen this? 

Thread already on it:
https://forums.moneysavingexpert.com/discussion/6581982/rachel-reeves-intervenes-in-uk-car-finance-mis-selling-case-to-protect-lenders#latest

~Brock~

There is a few points to be made on this.

It isn't a 'scandal'. 

The treasury wish to be involved in the supreme court hearing of cases which have nothing to do with discretionary commissions.  These are around whether a commission can be paid at all if the customer doesn't know everything about it, including the amount.

Up to that point, there was no requirement to disclose this amount, either in the regulatory rules or - importantly - established understanding of the law up to that point.

The Court of Appeal ruling is a confused judgement that seems to misunderstand the function of a motor dealer, and seems to view the selling of the motor vehicle and the arranging of the finance as two, mutually exclusive, activities when they are clearly not.  On that basis, how on earth can a dealer act on a 'disinterested' basis in relation to the finance when he is the same person who is selling the vehicle for an undisclosed profit.  Indeed, the finance commission may have been used behind the scenes to provide a discount on the price of the car.

The judgement is based upon a strange interpretation of the law of agency and its associated complications around fiduciary relationships.  It also seems to ignore established case law from even higher courts - e.g. Branwhite v Worcester Works Finance Ltd [1969] - which establish that a motor dealer, acting in the capacity of arranging finance, is not acting as an agent of the customer.

The fact remains that the finance terms, including the total amount payable, the monthly payments and the interest rate are fully disclosed before the agreement is entered into.  The ability for the customer to shop around and seek a better deal is therefore clearly not affected.

As such, the judgement and the assumptions behind it are deeply flawed and it is therefore absolutely right that such legislation cannot be left to stand unchallenged.  It is also right that both the FCA (who are potentially left rather embarrassed about the fact that regulated firms where following its rules to the letter) and the government wish to intervene to protect market stability and, not least, to prevent the UK becoming even more of a laughing stock to foreign investors and financiers.

This is, as ever, all about the claims industry who are allowed to run amok with their ever present search for more ways to get rich quick regardless of the destruction they cause.  This has now caused the perception in the public psyche that this is somehow another PPI like 'scandal', that everyone has been missold and that everyone deserves compensation. 

I repeat, this is not about discretionary commissions, which I agree 'could' be unfair in some cases.  I for one hope that the the supreme court throws the whole case out and leaves the claims firms behind this litigation with a huge bill for costs.