NEWLY-announced details of how eligible UK consumers will be compensated for mis-sold car finance has triggered a “flurry of interest” in the Jersey Consumer Council’s webpage advising Island motorists on how to investigate potential commission issues in their agreements.
JCC chair Carl Walker said there had been a rise in the number of people downloading template letters created by the Council, which be filled out and send to car dealers and finance providers.
It follows an announcement by the UK’s Financial Conduct Authority, which last year confirmed work was taking place on a redress scheme in response to an industry-wide motor finance scandal.
The scandal related to the use of discretionary commission arrangements in which the broker – often a car dealer – could adjust the interest rate being offered to obtain a higher commission.
An extensive review of motor finance agreements by the FCA found “widespread failures to adequately disclose the existence and nature of commission and contractual ties between lenders and brokers” and that many consumers “may have overpaid” as a result.
In an update earlier this week, the Authority revealed that more than 12 million agreements made between 2007 and 2024 are now eligible for compensation, potentially receiving an average payout of around £830 per agreement.
The JCC announced towards the end of last year that it was investigating “the level of potential exposure for consumers in our jurisdiction”.
Channel Islands Financial Ombudsman chief executive Douglas Melville, who has stated that local motor finance complaints were within his office’s mandate, said that he was aware of around a dozen cases so far – but that he expected this to rise.
Mr Melville has previously explained that consumers first have to lodge a complaint with the provider before approaching the Channel Islands Financial Ombudsman.
Mr Walker said that the recent UK announcement had triggered “a flurry of interest from across the Channel Islands in downloading our letter templates to be sent to the car finance firms and also the car dealers”.
“What we’ve done is pinned it to the top of our website on the front page, so people will be able to find it easily,” he added.
“You can download these letters and fill in the relevant details. It doesn’t matter if they can’t remember the precise details of when they bought the car, because the finance firms and the car dealerships should have this information.
“Then, when they receive a reply, or if they don’t receive a reply within 28 days, they can forward it on to the Ombudsman, who can take the case forward.”
