The financial regulatory authority involved in the finance mis-selling investigation has responded to Barclays’ attempt to overturn a crucial decision in the High Court, arguing that Barclays has not successfully demonstrated that the dealership in question did not generate a profit when it established its own commission rate.
Clydesdale Financial Services, trading as Barclays Partner Finance, began legal proceedings for a judicial review in April regarding a case concerning a car purchased from Arnold Clark. The ruling favored the customer who claimed unfair charges for motor finance.
Barclays Partner Finance was instructed to reimburse the customer the disparity between the payments made at the flat interest rate determined by the broker and the payments that would have been made if the agreement had been structured at the lowest, zero discretionary commission rate of 2.68%.
As a component of the judicial review process, the court must first determine whether to authorize advancement to a hearing. The Financial Ombudsman Service is upholding its initial decision by seeking to impede Barclays’ application.
The FOS findings prompted the Financial Conduct Authority (FCA) to commence a comprehensive assessment into potential mistreatment of customers in obtaining loans prior to 2021. In 2021, the FCA banned certain practices, suggesting that discretionary commission setups had encouraged brokers to inflate charges.
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