Help is at Hand for Motor Finance Lenders Facing Surge in Complaints

The Financial Conduct Authority’s (FCA) motor finance review has alerted banks to the possibility of a spike in complaints and potential compensation claims.

The review focuses on hidden motor finance commission known as ‘discretionary commission arrangements’ (DCAs), which is where lenders allegedly allowed brokers and car dealers to raise the interest in order to increase their commission – reports suggest that this resulted in consumers overpaying without knowing.

DCAs were banned by the financial watchdog in 2021, however, it has been reported that around 40% of car finance deals that were made before the ban involved a DCA.

As the FCA investigation generates more media coverage the volume of inbound customer calls is expected to rise significantly, even among those banks that did not operate DCAs.

The investigation will conclude in September 2024 at which point it is possible the regulator will set up some type of mass-scale redress scheme. However, there is nothing stopping those who believe they have been impacted by DCAs from lodging a complaint with their bank now.

Learning from PPI Experience

For those lenders who are facing a surge in complaints calls help is at hand in the form of business process outsourcing (BPO) providers with a track record of success in supporting financial services partners through similar situations. Firstsource partnered with many of the UK’s ‘big six’ banks in the aftermath of issues being identified with payment protection insurance (PPI) and won plaudits for its work in managing and helping resolve complaints. Providing complete end-to-end PPI complaint management for a leading high-street bank, Firstsource processed 250,000 complaints in just six months, with 80% of cases handled within 20 working days and 99% handled within 40 working days. With more than 400 skilled complaints handlers working for this particular banking partner, Firstsource’s scale and deep sector knowledge was a key factor in restoring customer satisfaction and boosting the bank’s net promoter score (NPS) during the PPI remediation process. Meanwhile, collaborating with another major UK bank on PPI complaints in 2016, Firstsource was successful in reducing call abandonment from 9.9% to 7.3%, while also reducing the average call handling time by 69 seconds. Commenting on the impact of the partnership with Firstsource, an operations leader at the bank said: “Since Firstsource came on board they have more than demonstrated their expertise and are no longer viewed as an outsourcer but an integral and trusted part of the team. We actively seek their input and opinion on process and call handling changes and Firstsource are always proactive in putting forward solutions to quickly resolve issues that they identify. “The implementations have made a dramatic and positive difference to the customer experience – as reflected in our key metrics – and I’m sure through our continuing collaboration will only improve further in the future.”

Automated DSAR Solution

Another important issue to consider in light of the motor finance remediation review is that of data subject access requests (DSAR). This is where individuals have the right to access and receive a copy of their personal data, and other supplementary information. Often the first step in a complaints/claims process is a DSAR, where motor finance lenders receive a request for all information held on a customer. This usually includes copies of relevant documentation and confirmation of how much commission was earned on the finance deal. Consumers have the right to make these requests, and banks responding must follow strict procedures and timescales. Firstsource offers an automated solution for dealing with DSARs, which can help relieve some of the pressure of handling the sheer volume of complaints/claims expected over the coming months.

Help is at Hand

The implications of the FCA motor finance investigation may seem daunting but Firstsource has the resources and expertise required to maintain customer satisfaction through this period. A combination of onshore voice support – delivered through Firstsource’s multiple UK call centres – and an automated DSAR offering provide a cost-effective and seamless solution to the motor finance remediation challenge that banks are facing.

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