15 April 2024

Motorists anticipating a PPI-style windfall from historic discretionary commission Arrangements (DCA) may have longer to wait following action last week by Barclays. The bank has filed a legal challenge against the Financial Ombudsman Service (FOS) over a decision in January that it should pay £1327 in ‘hidden commission’ from a historic DCA.

Experts say the challenge could now hold up the process for customers awaiting an outcome from the ombudsman.

Barclays is basing its challenge on what it says were misinterpretations of the law. It has not given any further details and court filings have not yet been published.

“This challenge relates to a single, specific case,” Barclays told the Telegraph, “and we continue to support the FCA’s review into historic motor financing arrangements.”

The FOS called the legal challenge “disappointing… when people take out a car loan, it is impetrative that they are treated fairly and the financial implications are totally transparent”.

Lloyds, the only other lender to have a complaint upheld following thousands of complaints to the FOS, said it was “reviewing the decision”.

No win no fee law firm Bott + Co. said Barclays’ judicial review was launched “at the eleventh hour, just a day or two before the three-month deadline to bring a challenge. This is just another example of lenders doing everything possible to frustrate the compaints process and delay things further”.

Last week, the FCA warned car loan providers to conserve cash to cope with potential compensation bills. It said it will use its “regulatory tools” against firms that appear to be attempting to “avoid potential future liabilities”.

Tags: Barclays, DCA, FCA, FOS