Template letters enabling Jersey motorists to investigate potential commission issues in their car finance agreements are now available to download from our website, allowing consumers to take the first formal step in establishing how their finance was arranged.
The letters, which can be sent to both car dealers and finance providers, are intended to help customers find out whether commission was paid on their motor finance and whether that commission may have influenced the interest rate or terms of the loan. With the templates now finalised and ready to use, Islanders are being encouraged to act.
Consumers can make a claim for any car finance taken out after 2010.
The release of the letters follows growing concern around historic commission practices in the motor finance sector. In many cases, customers were unaware that dealerships arranging finance could receive commission from lenders. Some arrangements allowed dealers to increase the interest rate offered to a customer in order to earn a higher commission, a practice that has since attracted regulatory and legal scrutiny in the UK and elsewhere.
While each case will depend on its own facts, the key issue is transparency. Borrowers should have been clearly told whether commission was being paid, how it was calculated, and whether it could affect the cost of their borrowing. Where this did not happen, customers may have been placed at a disadvantage and may not have been offered the most competitive finance available at the time.
The downloadable letters are designed to be straightforward. Customers are asked only to provide basic information, such as the approximate date of the agreement and the vehicle purchased. The letters request written confirmation of whether discretionary or flat commission arrangements applied, or whether there were exclusive relationships between dealers and finance companies.
If commission arrangements did apply and were not disclosed, the letters allow customers to raise a formal complaint. If firms are unable to confirm the position, the correspondence can also operate as a data subject access request, requiring companies to provide relevant records under Jersey’s data protection law.
Importantly, motorists do not need to be certain that they were affected before writing. The purpose is to establish the facts and begin the process. With the letters now available to download, Jersey car finance customers have a clear and practical way to take that first step.
Once people have received either a rejection letter to their request, or it has been three months with no reply, they can then raise the issue with the Channel Islands Financial Ombudsman.
You can download our template letters below, edit them yourself, then send them off.
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