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PCP Mis-Selling
Mis-sold car finance claims, which will follow Plevin as the basis for claims where hidden commissions are involved, are a lucrative opportunity for legal firms and claims management companies to generate significant revenues by helping their clients achieve financial justice.
While taking on car finance mis-selling claims should be an easy win for these firms, Barclays’ move to challenge the Financial Ombudsman in the High Court may not just delay the redress due to those with claims already with the FOS but to anyone with a claim currently sitting with a lender or being managed by a third party.
It was also noteworthy that Barclays waited until the last minute to challenge the FOS decision, meaning concerned Barclays car finance customers have already had a three-month delay to their redress payments.
To date, only Barclays and Lloyds have had car finance mis-selling complaints against them upheld by the FOS, which has received 17,000 complaints about commission on car finance deals, the majority of them in the past 12 months.
Other car finance brands have already been given the opportunity to delay their responses, with the Financial Conduct Authority not due to report on its investigation into the sector until September. Depending on how long the Barclays case takes, consumers might find themselves waiting even longer to get a response from their lender, let alone their money back.
While the regulator has told motor finance firms they must maintain adequate financial resources at all times, we’ve all seen how that plays out in other case types that end up falling on the FOS or FSCS.
There will also be a significant impact on law firms who have taken on cases on a no-win, no-fee basis but now know there is no realistic prospect of receiving any redress for their clients, and thus their own fees, until at least September, and most probably longer.
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