Navigating the New Financial Ombudsman Service Fee: What it Means for Motor Vehicle Finance Claims
The recent announcement by the Financial Ombudsman Service (FOS) has sent ripples through the motor vehicle finance industry. FOS has proposed a significant per claim fee for every motor vehicle finance claim submitted by a represented claimant, whether through lawyers or Claims Management Companies (CMCs). The suggested fee range of £150-£250 per case is causing a stir among industry professionals.
Industry Consultation
There is an ongoing consultation with the industry which will include me and other established lawyers and stakeholders to determine the level of fee and those cases to which it will apply.
We have considered the impact that this fee will have on the net profitability of these claims. The imposition of a fee brings into sharp focus the need to be efficient in onboarding claimants and determining which claimants are suitable for submission FOS given the recoverable fees and profitability per claim.
Efficiency and Profitability: Key Considerations
Therefore, it is crucial to assess the value of cases at the earliest stage. Given slim margins, firms will want to automate the process of initial credit checks and claim valuation so that they are only submitting claims to FOS which deliver a net return.
They will also want to minimise the costs of supporting clients with enquiries using technology to stand the best chance of profiting from what will be a surge of claims over the coming year given the hundreds of thousands of vehicles sold with a hidden commission.
We are already assisting some of the UK’s market leading firms with navigating the opportunity with motor vehicle finance claims, helping them avoid some of the costs and pitfalls of the manual processes I have had to work with over my career.
Thank goodness there are now solutions like ours.
Author: Sare Brownhill
Sare has worked in civil litigation for 24 years, in her career she has been both a litigator and latterly Head of Litigation. She is a qualified Legal Executive. She now dedicates her time to helping firms thrive within the constraints of CFAs, DBAs and fixed fees by using best in class automation to maximise claimant engagement and automate repetitive, costly work.
