The Financial Ombudsman Service (FoS) recently published its annual complaints data for the 2020/21 financial year (April 2020-March 2021; their report provides some fascinating data;

  • FoS received nearly half a million enquiries
  • Formal complaints ex PPI totalled 235,993
  • HP Motor accounted for 3.3% of complaints
  • Personal loans accounted for 3.3% of complaints
  • Bank Current Accounts, Home Loans and Guarantor Loans were the most complained sectors accounting for 28% of the total

This was achieved by signposting customers and businesses to the information they needed or giving a steer on a fair way forward. The other area of note was the modest number of complaints about HP motor finance, which were very slightly lower than for personal loans, despite the additional Section 75 Consumer Credit Act 1974 protection applicable to HP but not for personal loans.

The picture at MotoNovo is impressive, given the broader FoS benchmark; 97% of all complaints are resolved successfully with only 3% ever referred to the Ombudsman.

Reflecting upon the Ombudsman’s report MotoNovo Finance’s COO Dave Briggs notes;

“I am very aware that customer complaints and the Financial Ombudsman Service can be a source of frustration for dealers and that invariably dealers are committed to providing great customer service. However, in today’s increasingly litigious environment, we must do all we can to improve our processes and communication, engaging with customers to manage their expectations, generate goodwill and pragmatism.”

While it's important not to put barriers in place of customers who wish to complain, dealers looking to minimise complaints can look to a separate report published by the Ombudsman in January highlighting the key areas of HP/PCP complaints. These were:

  • A car that is faulty or not of satisfactory quality
  • The car or finance agreement was mis-sold or misdescribed to the customer and they were unhappy with a key term – like the annual mileage allowance
  • Unhappiness with charges that they’ve been asked to pay at the end of the agreement

Dave concludes;

“The list points to the importance of formal evidenced processes at the point of purchase. Ensuring transparency and understanding of the finance agreement and supplying rigorous PDI documentation/history at the outset set the scene for the customer. Should a complaint arise, addressing the customer’s concerns positively and fairly is always the right thing to do.”

Press release issued by MotoNovo Finance, July 2021

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