The Financial Ombudsman Service (FOS) is introducing new case fees to tackle the rising number of unfounded car finance claims. This move aims to reduce speculative complaints while ensuring genuine cases receive proper attention. The decision follows a surge in claims related to mis-sold car finance agreements, many of which lack substantial evidence.
Why Has the FOS Introduced New Fees?
Over the past two years, the number of car finance complaints has skyrocketed. Many claims are driven by claims management companies (CMCs) encouraging consumers to seek compensation without clear evidence. The FOS has received over 40,000 car finance-related cases, costing financial firms millions in case-handling fees. To prevent abuse of the system, a fee of ¦50 per case will now be charged for claims that are clearly unfounded.
How Will the Fee System Work?
Consumers can still bring complaints to the FOS without an initial cost. However, if a case is deemed meritless, the claimant may be liable for the new fee. This policy aims to deter CMCs from flooding the FOS with speculative claims while protecting the rights of those with legitimate grievances. The FOS states that this change will allow investigators to focus on valid cases, ensuring faster resolutions.
Impact on Car Finance Complaints
The introduction of fees could significantly reduce the number of cases brought to the FOS. In the past year alone, over 60% of car finance claims were dismissed due to lack of evidence. Industry experts believe this new measure will discourage false claims while providing a fairer process for genuine complaints. Consumers are urged to ensure they have proper documentation before submitting a claim.
What This Means for Consumers
If you believe you were mis-sold a car finance deal, it’s essential to gather relevant evidence before making a claim. Key documents include your original agreement, any correspondence with the lender, and proof of financial losses. Without sufficient proof, your case may be dismissed, and you could be charged the new FOS fee. Those seeking black horse compensation or similar claims should carefully assess their eligibility before proceeding.
How to Make a Legitimate Car Finance Claim
To increase your chances of a successful claim, follow these steps:
- Review Your Agreement: Check for undisclosed commissions or unfair terms.
- Contact Your Lender: Attempt to resolve the issue before involving the FOS.
- Gather Evidence: Include all communication and financial statements supporting your case.
- Submit a Strong Complaint: Provide clear reasoning and documentation to support your claim.
- Seek Independent Advice: Consult with a financial expert or Citizens Advice before using a CMC.
Conclusion
The FOS’s new fee structure aims to restore balance to the complaints process. While genuine claims will still be heard, those attempting to exploit the system may face financial penalties. If you’re considering a car finance claim, ensure you have valid grounds and strong evidence to support your case. This change should lead to quicker resolutions and a fairer process for all involved.