Covert car finance deals jump-start latest mis-selling scandal

The regulator has hit the brakes on processing of a surge of motor finance complaints, after undisclosed commission arrangements were followed by firms engaging "in wholesale breaches of DISP 1.4.1R and its accompanying guidance". We have been down this road before, in PPI and Plevin, writes Adam Samuel.

Adam SamuelBA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted atadamsamuel@aol.com.You can purchase Adam's latest book 'Compliance - a Short Book' at www.amazon.co.uk/Compliance-Short-Book-Adam-Samuel-ebook/dp/B0CTRYBN1J/. For links to where you can buy the second edition of 'Consumer Financial Services Complaints and Compensation', seewww.adamsamuel.com/writing.

On 10 January, the FOS issued two lengthy decisions answering the question in ringing terms. It found that Barclays and Black Horse had both acted unfairly before the prohibition was imposed in allowing their brokers to increase the interest rate on a car finance arrangement and so earn more commission. In both cases, the broker could have earned a fee by offering the lowest level of interest rate but increased its remuneration by selecting a figure above that. The same ombudsman, Jeshen Narayanan, ordered the firms to pay back any amounts paid over the minimum acceptable rate with interest from date of payment at eight per cent.