Hayley Plant

• Oct 06, 2024

• 2 Minute Read

What does the Court of Appeal ruling on finance commissions mean for car leasing companies?

The Court of Appeal has ruled in favour of consumer complaints, meaning lenders must disclose any commissions made in a sale

Earlier this year, the Financial Conduct Authority (FCA) started investigating whether some car finance customers were charged too much through a Discretionary Commission Agreement (DCA).

As a part of that investigation, three consumers have argued that the car dealers, acting as brokers, failed to disclose commission payments and that affected the impartiality of the finance advice they gave.

The ruling emphasised that car dealers acting as credit brokers have a “fiduciary duty” – which means they have the legal responsibility to act solely in the best interest of another party – to disclose any commissions received to their customers.

This is a hugely significant ruling, and the Court of Appeal’s decision could set a new legal standard for disclosure, with finance agreements requiring more transparency about commissions moving forward.

Support for Car Leasing Companies

AuditWise is cloud-based quality monitoring software solution that empowers organisations to evaluate and score the quality of their customer interactions, operations and processes whilst having the ability to identify any compliance issues.

By embracing AuditWise, leasing companies can confidently adapt to the Court of Appeal ruling, minimizing compliance risks and protecting their reputation. With this powerful tool at your disposal, staying compliant with evolving regulations is not only achievable but can even offer a competitive advantage by ensuring your business is known for integrity, accuracy, and customer trust.