The Jersey Consumer Council has done some work on the issue and has produced template letters which islanders can fill out and send on.
JCC chairman Carl Walker said there had been a rise in the number of people downloading its template letters.
The UK’s Financial Conduct Authority last year confirmed that work was taking place on a redress scheme in response to an industry-wide motor finance scandal relating to the use of discretionary commission arrangements in which the broker – often a car dealer – could adjust the interest rate being offered to obtain a higher commission.
An extensive review of motor finance agreements by the FCA found ‘widespread failures to adequately disclose the existence and nature of commission and contractual ties between lenders and brokers’ and said that many customers may have overpaid as a result.
It said that more than 12m. agreements made between 2007 and 2024 were now eligible for hundreds of pounds in compensation. The Consumer Council said that interest in claiming had increased.
Mr Walker said that people needed to send the template letters to car finance firms and car dealers.
When or if a reply is received, or not, they can forward the case to the Channel Islands Financial Ombudsman, which has said that it has seen complaints and expects more to come.
Motor finance review finds firms now treat customers fairly
A REVIEW of firms offering motor finance in the island has found that generally they are treating customers fairly and working within new rules introduced in 2023, which give customers more rights when taking out motor finance agreements.
The Guernsey Financial Services Commission carried out the thematic review, its first under the 2023 Lending and Credit Law.
It covered the use of loans and credit to purchase vehicles, including personal loans, hire purchase and personal contract purchase agreements.
The review noted that firms were no longer using discretionary commissions arrangements, which were banned under the new law, though improvements could be made to the disclosure of commissions, including those paid by lenders to brokers, and by brokers to sales staff.
Information, including the annual percentage rate on loans, was generally being passed to customers, but in some cases it could be clearer.
And traders could do better in the quality of information and customer records kept, the commission said.
Alongside a survey, questionnaires were sent to lenders and brokers, desk-based reviews were undertaken, and 15 onsite visits were conducted, which provided a comprehensive picture of industry practice.
‘The findings of the thematic were broadly positive, with most firms demonstrating their commitment to meeting the requirements of the LCF legislation and embedding fair treatment of customers within their practices,’ the commission said.
‘Looking ahead, where issues have been identified, we will work with firms through our ongoing supervision, to ensure that any necessary improvements are made.’