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Claimsline & Bott Co.’s Collaborative Mission to Rectify the £15 Billion Mis-sold Motor Finance Scandal in Automotive Industry

In a recent interview with Automotive Industries, Andrew Franks, Co-Founder of Claimsline, discussed the collaboration with Bott & Co to address the mis-sold motor finance scandal. Franks highlighted the longstanding relationship with Bott & Co, emphasizing shared values in championing consumer rights across various legal domains.

 

The mis-sold motor finance scandal, estimated at £15 billion since 2007, prompted Claimsline and Bott & Co to take action. Franks outlined the significant impact on consumers, with an average overcharge of £300 million per year. Claimsline’s role involves simplifying the claims process by allowing clients to fill out an online form, automatically generating a letter of claim to lenders on their behalf.

 

Franks acknowledged the challenge of ensuring consumers are aware of their eligibility to claim and emphasized the need for a clear framework post the Financial Conduct Authority’s investigation, which is set to conclude in September. He discussed Claimsline’s streamlined approach, utilizing technology to collect and process relevant information swiftly.

 

The collaboration between Claimsline and Bott & Co aims to streamline the claims process, with both firms integrating their technology systems. Franks highlighted Bott & Co’s efficient and automated systems, minimizing client involvement and ensuring a comprehensive approach to justice for affected individuals.

 

Regarding the evolving regulatory landscape, Franks mentioned the positive changes in car finance practices implemented in 2021. He noted the impact on industry players like Close Brothers and Lloyds, emphasizing the need for compensation to customers unfairly overcharged prior to these reforms.

 

With nearly 730,000 claims or enquiries in progress, Franks discussed an upcoming nationwide marketing campaign to educate individuals about the issue and encourage them to use Claimsline’s form to check eligibility.

 

Looking ahead, Franks shared a vision for enhanced consumer protection in the automotive industry. While acknowledging positive changes, he stressed the importance of compensating those unfairly treated in the past. The partnership between Claimsline and Bott & Co aims to contribute to this positive shift in industry practices through their combined expertise and streamlined processes.

 

Automotive Industries interview with Andrew Franks, Co-Founder of  Claimsline

 

Automotive Industries: Hi Andrew, what prompted Claimsline to collaborate with Bott and Co in addressing the mis-sold motor finance scandal, and how does this partnership align with Claimsline’s mission and values?

 

Franks: Claimsline has had a long standing working relationship with Bott & Co within different areas of law. Both Bott’s and Claimsline’s values are aligned, with our core values as leading consumer champions and ensuring that consumers are treated correctly in all aspects of law whether that is after an accident in their vehicle by giving them a better claim journey than using their insurance or taking out a car finance agreement and unknowingly being unfairly overcharged.

 

Automotive Industries: Can you elaborate on the potential impact of the mis-sold motor finance scandal on consumers, and what role do you envision Claimsline and Bott and Co playing in providing justice and support to affected individuals?

 

Franks: Based off the FCA’s initial research they believe that consumers were being overcharged on average £300m per year with total claims valued at around £15bn since 2007. Bott & Co have been at the forefront in investigating mis-sold car finance agreements since 2019 and disclosing their findings directly to the FCA and winning the first claim of this type in court at the beginning of this year. Claimsline are providing clients the ability to fill out a simple online form, automatically pulling all car finance agreements that they have had active within the past six years and pre populating a letter of claim to those lenders on behalf of the clients. It is estimated that around 40% of car finance agreements within this timeframe being affected by discretionary commission arrangements.

 

Automotive Industries: Given the scale of the scandal and the ongoing investigations by regulatory bodies, what challenges do you foresee in navigating the complexities of the automotive industry, particularly concerning hidden and unfair car finance commission practices?

 

Franks: The main complexity that I see is consumers taking the time to check whether they are eligible to claim for the finance they took out. Ultimately, after the nine month investigation period by the FCA which is due to be completed in September this year, there should be a clear framework and matrix used to quantify the value of these claims and a time limit set to bring these claims to light.

 

Automotive Industries: Andrew, you mentioned championing consumer rights. How does Claimsline plan to advocate for consumers throughout the claims process, especially considering the estimated 40% of car finance deals with hidden discretionary commission arrangements?

 

Franks: We offer our clients a really simple tool on our website to fill out basic information which then automatically collects all of the car finance agreements which could be affected during these periods. We automatically collect these agreement numbers, vehicle registrations and send out a letter of claim to the lender instantaneously. This saves clients the need to search for historic agreements which they potentially cannot locate, or contacting the lenders asking for the finance agreements to be posted out of which there is a huge backlog in doing. Our process provides clients a much more frictionless and swifter access to justice.

 

Automotive Industries: Coby Benson mentioned the commitment to delivering justice for consumers. Can you provide insights into the legal support Bott and Co intends to offer individuals navigating their claims in court, and how this support might differ from other approaches in the legal field?

 

Franks: Bott & Co’s systems that they have in place are extremely slick, meaning there is minimal to no involvement required from the claimants, with all of their internal processing of claims automated using technology similar to what they have done pioneering the way and legislation on flight delay claims.

 

Automotive Industries: How will Claimsline and Bott and Co collaborate to streamline the claims process for affected individuals, ensuring a comprehensive and efficient approach to addressing the widespread implications of the mis-sold motor finance scandal?

 

Franks: Both Claimsline & Bott’s systems using technology is integrated within one another to allow both the inception of claims to be simple and frictionless and the processing and legal element of the claims processed by Bott & Co being streamlined and automated without the need in most instances of human or client intervention.

 

Automotive Industries: In light of the Financial Conduct Authority’s investigation into hidden and unfair car finance commission practices, how do you anticipate the regulatory landscape evolving, and what impact might it have on the automotive industry as a whole?

 

Franks: The way car finance is sold by both dealers and brokers changed in late 2021; a rate for risk was implemented in line with the FCA’s guidelines of treating customers fairly. If your credit is perfect and you went into a dealership to purchase a car you will be given the best possible rate, whereas previously the dealership or broker had the ability to toggle or increase the rate to achieve a higher finance commission which is the basis of a discretionary commission agreement and the root cause of these claims.

 

You can see over the past month the market capitalisation of Close Brothers has almost halved in light of these claims and Lloyds have already provisioned £450m towards compensating victims. I think now the industry has cleaned up their act since what was implemented in 2021 but unfortunately prior to that it wasn’t the case and compensation needs to be paid out to customers who were unfairly overcharged for 14 years for financial gain to dealers, brokers and lenders.

 

Automotive Industries: With almost 730,000 claims or initial enquiries underway, how do Claimsline and Bott and Co plan to educate and encourage individuals who may have been affected by mis-sold motor finance agreements to seek assistance?

 

Franks: We are imminently going live with a nationwide marketing campaign across a number of channels both online and offline, educating people of the extent of the issue and encouraging people to use our form to check if you could be eligible to make a claim.

 

Automotive Industries: Looking ahead, what is the shared vision of Claimsline and Bott and Co for consumer protection within the automotive industry, and how do you see the partnership contributing to a positive shift in industry practices?

 

Franks: As mentioned, I believe the vast majority of changes were implemented in late 2021 to ensure that consumers are being treated fairly and any credit provided is based off a risk basis, but prior to that unfortunately that was not happening.

 

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