Paul Tilley: Your Trusted Consumer Law Expert at Roach Pittis
Discretionary Commission Arrangements [DCAs] on Vehicle Financing
Unsurprisingly the Financial Conduct Authority has announced their investigation into Discretionary Commission Arrangements [DCA] in connection with the motor finance sector. DCAs were arrangements between brokers and lenders that allowed the broker to influence the interest rate that the borrower was charged, crucially without the borrower’s knowledge.
The Financial Conduct Authority outlawed DCA’s in 2021 along with any other secret commissions between brokers and lenders. However, the difficulty with hidden commissions is how does the customer truly know if they have been subject to such an arrangement?
Secret Commissions
Secret commissions are not a new invention, they have been an issue for many years as can be seen from cases such as Industries & General Mortgages Co. Ltd. v Lewis [1949] 2 All ER 573 and most recently Wood v Commercial First Business Ltd & Ors [2021] EWCA Civ 471. The difficulty for the consumer is that the arrangement is often not disclosed, it is after all the secrecy in the commission that is the issue. Even where the customer is notified, it is often hidden in the small print, or the term setting out the arrangement is drafted in such a way that it is confusing or misleading.
Here at Roach Pittis, we have expertise in all aspects of consumer law, we routinely deal with secret broker commissions in all types of areas. Here are a few examples:
Mortgage lenders
Secured lending including second charge lending disputes
Defective consumer products including those purchased using credit
Disputes arising under the Consumer Rights Act 2015
Disputes arising under the Consumer Credit Act 1974 including claims under section 75
Unenforceable credit agreements / unfair relationships.
Often disputes with lenders can have an impact on a customer’s credit file too. We regularly assist with removing adverse markers from the customers credit file, if the data is inaccurate or the underlying dispute which gave rise to the negative entry is resolved in the customers favour.
We also have expertise in unfair contract terms involving the Unfair Terms in Consumer Contracts Regulations 1999 and for contracts after 2015, under the Consumer Rights Act 2015. Unfair terms can be found in all types of contracts, not just finance agreements and if the term is ruled to be unfair then it will not be binding on the customer.
For expert, impartial advice on these and many other areas of consumer law, get in touch with Paul Tilley today on pt@roachpittis.co.uk / 01983 524431
