Close Brothers Share Discussion Threads

[trying2trade] 13/11/2024 12:56

Martin Lewis raising some thoughts about the whole thing now, very interesting.

[tomboyb] 13/11/2024 12:55

Until CBG make provisions and put a figure on the possible loss, the market will continue to punish the share price It's a shorters dream atm.

This is one of the problems -

How deeper problem this is for the company we will have to wait and see -

[stoopid] 13/11/2024 12:24

Until CBG make provisions and put a figure on the possible loss, the market will continue to punish the share price It's a shorters dream atm.The other thing they will need to show is that they can continue with an acceptable Tier 1 ratio and show a way out of this minefield. They are currently in.

[hardup1] 13/11/2024 11:29

From todays FT.

Reeves seeks reform of UK consumer redress in the financial services sector.

Chancellor Rachel Reeves will on Thursday call for an overhaul of the UK system for consumer redress in the financial services sector, as lenders brace for a potential multibillion pound bill for alleged mis-selling of car finance.

Reeves wants to modernise the operation of the Financial Ombudsman Service (FOS) to give consumers and businesses more clarity about the compensation landscape in future, according to allies of the chancellor.

She will use her Mansion House speech on Thursday to promise stability as she attempts to reassure her City of London audience that she has a clear economic growth strategy following her £40bn tax-raising Budget.

The role of the FOS in major City compensation cases has been under scrutiny in the Treasury for months, but Reeves’ allies said the need for reform had been brought into stark relief by recent turmoil in the car finance sector.

The FOS has taken a consumer-friendly stance on complaints over alleged mis-selling of car finance that has put the Financial Conduct Authority, the chief UK financial regulator, on the back foot, and threatened to leave banks exposed to compensation claims worth billions of pounds.

To read the full article go to this link

[thebutler] 13/11/2024 11:16

I don't think there's any dispute that it's OK to receive commission in everyday buying and selling, the issue with motor finance is that there's a written finance agreement detailing the cost of the car, the interest payable, etc etc etc but the commission to the dealer has essentially not been disclosed and might have influenced the buyer's decision to go ahead and buy the vehicle, just like the rate of interest might have done.

I talked to a mortgage broker when I bought a house several years ago and the cheapest quote he showed me included a £400 commission payable to himself, which stopped me proceeding because I could save that money by arranging a mortgage myself online. When buying a car there's a tendency for a dealer to try and rope you into buying more or less straight away by waving the agreement under your nose stressing you're getting a good low interest deal when in fact there's a few hundred commission you haven't been told about which you could avoid if you took out a personal bank loan and came back with that money a couple of days later. But it's as though the car dealer bends over backwards to stop you arranging your own finance. They've only got themselves to blame ...... this is a serious situation imo.

[tomboyb] 13/11/2024 11:02

Martin Lewis
@MartinSLewis
Car finance & potential commission reclaims, is it fair, is it dangerous?

Until the last couple of weeks we were only talking about possible refunds where people had hidden Discretionary Commission Arrangements (DCAs) which meant dealers could up interest to get paid more commission, without consumers knowing. In this area you can see the argument of lack of transparency and restriction of consumer choice.

Then a fortnight ago the Court of Appeal ruling came and said 'consumers need to know all material facts including the amount of commission' which opens the door to possible reclaims for all car finance commission and indeed could read across to other lending areas (though it will all depend on if the Supreme Court backs up that view on appeal) and today the FCA said people should log complaints on that too in case of a future time bar (see my earlier post).

When mulling this, I find it more difficult to see the unfairness and that redress is due on car finance firms with fixed commission that were following regulators guidelines. And even then if it is thought that redress must be due, the test surely must be something like was it hidden that there was commission, and most importantly was the commission charged excessive?

If not and we move to a model of car finance reclaims of 'any commission if amount wasn't known' was unfair and should all be repaid, is a push even for me, and may risk being counterproductive to consumers as it is a potentially existential threat to the consumer lending and could both mean less availability and higher costs in future.

I'd love to know your thoughts as to where the boundary should be..

[alphapig] 13/11/2024 11:02

Premium bond are looking better and better.

[tomboyb] 13/11/2024 10:54

Martin Lewis
@MartinSLewis
HUGE CAR FINANCE NEWS: (pls share) Now most people who’ve had any type of it are being urged to complain – doubling the numbers.

Minutes ago, the regulator, The FCA, announced it's consulting for two weeks (so quick, it's a likely done deal) on extending the time firms have to handle motor finance commission complaints. This is on the back of a Court of Appeal ruling a couple of weeks ago and the extension is to incorporate a potential Supreme Court decision.

- The Key Bit: While not specified in its announcement, I've had it confirmed this applies to ALL car finance commission complaints, not just the Discretionary Commission Arrangements (DCAs) complaints previously covered.

- What this means: It signals that the FCA is paving the ground to in future broaden the scope of its car finance investigation, so not only at the 40% of past claims that had DCAs (where dealers could increase their commission by increasing interest) but all commissions including fixed commissions.

This is on the back of the Court of Appeal ruled 'consumers need to know all material facts including the amount of commission' which they often weren't told even in fixed commission cases.

It looks like (I need to dig) if the hold is extended, almost everyone who has had car finance deals may have a complaint (I need to examine timelines of what counts) and be potentially due money back (this includes those already rejected as they were told they 'didn't have a DCA')

This potentially more than doubles the number of people involved, and would really start to look more like PPI scale of payouts (and a substantial threat to the car finance industry)

- What should people do: The FCA will suggest people log their complaints sooner including fixed commission complaints, in order to avoid missing out due to a potential time bar. I will work with my MSE team to expand our MoneySavingExpert free complaints (that's already had 2.5m complaints through it) to help the new cohort of people who may be able to complain.

- What will the outcome be: I think this makes it more likely that DCA commission cases will get future payouts. For 'fixed' commissions, this isn’t about the FCA, it all strongly swings on if the Supreme Court upholds the Court of Appeal ruling (assuming it accepts the appeal to it, which the FCA has urged it to do, and to do at speed). That’s the key to if the FCA will broaden its scope.

These are provisional first thoughts, bashed out at speed, obviously there's more work to do, but it is big.

[albert arthur] 13/11/2024 10:51

https://x.com/martinslewis/status/1856615332577677416?s=46

[albert arthur] 13/11/2024 10:50

HUGE CAR FINANCE NEWS: (pls share) Now most people who've had any type of it are being urged to complain – doubling the numbers. Minutes ago, the regulator, The FCA, announced it's consulting for two weeks (so quick, it's a likely done deal) on extending the time firms have to handle motor finance commission complaints. This is on the back of a Court of Appeal ruling a couple of weeks ago and the extension is to incorporate a potential Supreme Court decision. - The Key Bit: While not specified in its announcement, I've had it confirmed this applies to ALL car finance commission complaints, not just the Discretionary Commission Arrangements (DCAs) complaints previously covered. - What this means: It signals that the FCA is paving the ground to in future broaden the scope of its car finance investigation, so not only at the 40% of past claims that had DCAs (where dealers could increase their commission by increasing interest) but all commissions including fixed commission

[tomboyb] 13/11/2024 10:24

What the FCA are saying is that we will intervene to show to the supreme court what we have done is the right decision -

Quite extraordinary that statement -

It suggests that the FCA know their decision is completely correct -

Whether it is or not will have to be seen by the supreme court -

[jonnybig] 13/11/2024 10:00

Wishful thinking, Tom.

spud

[tomboyb] 13/11/2024 08:58

If permission to appeal is granted, the FCA will consider intervening to share its expertise to assist the Court.

From an FCA perspective it does look like they think the decision is a slam dunk -

[jonnybig] 13/11/2024 07:58

I can't believe the lenders are going through all this scandal again after PPI. Looking at everything written about it so far, it looks like there's been woefully inadequate transparency about the commission, to the extent it looks somewhat sleezy. Not looking good here I'm afraid.

spud

[thisaintme] 13/11/2024 07:18

If anyone is interested, This story was published last night by Thisismoney...



Well worth the read.

[blackhorse23] 12/11/2024 22:21

Sad stories

[blackhorse23] 12/11/2024 22:21

The order also noted that the lenders also have to pay nearly £65,000 for the claimants' costs of the proceedings, the Appeal hearing and interim payment by 4pm 15 November. Likely miss the deadline and pay more penalties

[albert arthur] 12/11/2024 18:52

https://www.cityam.com/close-brothers-warned-of-640m-hit-if-car-loan-scandal-spreads/Close Brothers warned of £640m hit if car loan scandal spreads

[trying2trade] 12/11/2024 17:11

So if you were to strip out the motor finance part of the company, what's the rest as a going entity? Sell it all off, allow what's left to 'go bust'?

[tomboyb] 12/11/2024 16:23

The stupidity of it -

Close has a pretty good business and has done for many years -

This will drag the company down however I do think it will survive -

[tomboyb] 12/11/2024 16:20

Only problem here is that the supreme will hear if it is even worth considering hearing the case -

That imo puts Close on very thin grounds -

Its a complete mess -

[tomboyb] 12/11/2024 16:18

Rejected by the court of Appeal -

However :

Following this decision, the only option left for the lenders is to apply directly to the Supreme Court, which will first consider if it needs to hear the case.

[thisaintme] 12/11/2024 15:57

Motor finance: Court blocks Close Brothers pathway to Supreme Court..

hxxps://www.cityam.com/motor-finance-court-blocks-close-brothers-pathway-to-supreme-court/