Martin Lewis issues major car finance scandal update to Barclays customers

Martin Lewis has issued a major car finance scandal update - after Barclays LOST a judicial review. On 17 December 2024, the High Court found in favour of the Financial Ombudsman, in a review of its decision to uphold a complaint relating to a discretionary commission arrangement (DCA) in a motor finance agreement.

The Court dismissed all 3 grounds of appeal brought by the lender, Barclays Partner Finance. ITV and BBC star Mr Lewis wrote: "Barclays has lost its judicial review against Car Finance Discretionary Commission Arrangements (DCAs) claims. This strengthens the liklihood of @theFCA ruling there should be a mass redress system for DCAS Free complaint tool here."

Mr Lewis went on and added: "PS This is separate to the other case going to the Supreme Court appealing the court of appeal ruling on all commissions. This is only about DCAs (explained via the complaint tool link)." The Judge found that the Financial Ombudsman had interpreted our rules and the Consumer Credit Act 1974 correctly when deciding that the lender and car dealer involved in this case did not meet the relevant standards in place at the time.

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The Financial Ombudsman was entitled to find that the dealer and the lender did not adequately disclose their commission arrangements to the borrower and that the relationship between the lender and the borrower was unfair in those circumstances.

The FCA confirmed in a statement in the wake of the ruling: "We welcome the additional clarity this judgment brings to consumer complaints involving DCAs. We are currently reviewing the use of DCAs in the motor finance market before our 2021 ban.

"Our review seeks to understand if there was widespread misconduct related to DCAs, if consumers have lost out and, if so, the best way to make sure any compensation owed is received in an appropriate settlement in an orderly, consistent and efficient way. We gave firms more time to provide final responses to complaints about motor finance where a DCA was involved while we carried out our review."