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As financial services face a potentially massive bill for compensating consumers who were ripped off by the commission model operating in car finance over the last decades, suddenly Rachel Reeves has decided its time to review and 'stabilise' & 'modernise' the Financial Ombudsman Service..
Why?
I'm sure it has nothing to do with the consumer favouring decisions its made over car finance, which apparently took the Financial Conduct Authority by surprise.
#FinancialServices #fraud
h/t FT
Do you think car finance is a mini-2008-'sub-prime' crisis about to hit the UK ?
I think its unlikely, partly as the sums are much smaller.... but it will (if it goes ahead) end up, like the last compensation jamboree end up being a shadow Keynsian temporary boost to 'effective demand' as few recipients will save their payments..... so it may actually help the Stramer/Reeves economic narrative foe a period
@ChrisMayLA6 @GeofCox I filled in the claim form for my first car, bought in 2019 and got a surprisingly quick reply advising that the VW main dealer did not get any extra commission from BMW Financial Services (which seems believable, as the amount wasn't much different to that for the HP agreement for my current car which was after the practice was stopped). I suspect a lot of companies will try and nudge successful claimants towards using the payoff to buy another car..
@ChrisMayLA6 same reason as the have lots of different offices to investigate fraud. It removes responsibility and nothing is done.