Credit, Collections & Insolvency News
Consumers have been warned over the plague of claims management firms targeting people who may have been mis-sold a car finance deal annual data from the Financial Ombudsman Service (FOS) has revealed.
FOS analysis of shows there were 11,452 complaints about motor finance deals between in the twelve months to March 31, up from 6,128 in the previous financial year.
The proportion of claims relating to commission, fees and charges on these products increased from 1,472 in 2021/22 to 5,658 in 2022/23.
FOS says about 90% of the complaints covering 2022/23 have been brought by third-party representatives – claims management firms and law firms.
Commenting on the dat, Consumer rights expert Martyn James said “The latest ombudsman data seems to be driven by the plague of claims management companies who previously dominated the PPI market.”
“The recent rise in complaints follows a ban on motor finance ‘discretionary commission’ that came into force in January 2021 after the Financial Conduct Authority ruled that its widespread use “creates an incentive for brokers to act against customers’ interests.”