Major update for 60,000 drivers on mammoth car finance compensation bill A MAJOR update has been issued on the car finance commission scandal with a mammoth compensation bill expected.
The UK's motor finance industry is bracing for a potential multi-billion pound compensation bill as the Financial Ombudsman Service (FOS) grapples with a surge in complaints related to commission practices.
Under a now-banned discretionary commission arrangement (DCA), dealerships and brokers had a financial incentive to charge higher interest rates, as their commission increased proportionally.
"So what we've tried to do is learn from that event, prepare our ground, make sure we've got the training in place, we can scale up our resources quickly, we understand the product, we've got the legal advice, we've got the digital platforms to deal with the cases, so that if they do come through to us, we’re able to scale up quickly, so we can provide the best service we can to customers.".
According to the FCA, on a typical £10,000 motor finance agreement, discretionary commission arrangements could have caused customers to pay an additional £1,100 in interest over a four-year term.
