The financial watchdog at the centre of the finance mis-selling probe has hit back at Barclays’ bid to quash a key ruling at the High Court, claiming it has failed to prove that the dealership in question did not make a profit when it set its own commission rate.
Clydesdale Financial Services trading as Barclays Partner Finance in April initiated judicial review proceedings relating to a case involving a car bought from Arnold Clark that was judged in favour of the customer who claimed to have been unfairly charged for motor finance.
Barclays Partner Finance was ordered to pay the customer the difference between the payments she made at the flat interest rate set by the broker and the payments she would have paid if the agreement had been set up at the lowest, zero discretionary commission paying interest at a rate of 2.68%.
As part of the judicial review process, the court first has to decide whether to grant permission to proceed to a hearing. The Financial Ombudsman Service is defending its original ruling by attempting to block Barclays’ application.
The FOS findings prompted the Financial Conduct Authority (FCA) to launch a wholesale review into whether customers had been unfairly treated when securing loans before 2021 when the FCA banned the practice, believing discretionary commission arrangements had created an incentive for brokers to increase how much people were charged.
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