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Basher, when someone copies text out of an AI model and does not perform even a basic sense check it looks rather obvious.

"even if they don’t meet the legal threshold of fiduciary breach"

The Supreme Court ruled there was no fiduciary obligation, the AI model still thinks the court of appeal ruling is relevant or the model is still in 2024.

Humour of the day popcorn.... munch... munch...

The Court of Appeal in Harrison v Black Horse Limited [2011] EWCA Civ 1128 determined that an undisclosed commission of 87% did not give rise to an unfair relationship (without additional misconduct), on the basis there was no breach of the Insurance Conduct of Business (ICOB) rules. i.e. the 2007 FCA Handbook rules that were appllicable at the time, because there was no explicit rule covering disclosure for retail (there was for commercial upon request only).

The lack of a disclosure rule (or request), then frames the commission as fair and not considered unfair in relation to S140 in isolation, without any other considerations in that case instance.

PPI appllied the fact that there was no disclosure, nor any way for the consumer to derive a secret commission. Unlike in motor where the IDD clearly stated a commission may be paid and was partially disclosed and on top of that a regulatory reqirement to disclose if requested. No secret, hidden or deliberately concealed equivalents, hence the Supreme Court making a note that Plevin did not apply.

Tick box b (35% and 10% arbitrary calculation) does not exist as a regulatory CONC rule and Black Horse (when considering the Supreme Court ruling that PPI did not apply) would still appear to stand where no regulatory rule is broken (or unfair, secret, deliberately concealed, non disclosed commission existed in the instance of PPI). PPI did not negate the Black Horse ruling entirely, only it's applicability in PPI and secret, deliberately concealed commissions.

Just another plausible issue stacking up on the 2007-2013 nonsense. I'm posting all these as a type of working notes and sense check opporunity (getting flamed, ridiculed, bring it on, etc.) tyring to avoid an echo chamber.

My thought at this point is that 2007-2013 faces significant and numerous hurdles for the FCA to jump over in a court appeal at this point, not only 2007-2013 but the arbitrary 35% / 10% tick box as well.

More guesses, errors and tin foil hats from me. Do your own homework, think (and check your chat GPT ramblings actually has the right date for the consultation paper at least).

Horse feed popcorn... munch... munch...

The BMW aspect will be highlighting the DCA and commercial tie tick box the FCA invented (in an isolated tick box manner) as unfair, which strangely enough the FCA seems to contradict the DCA tick box quite clearly in their own written submission to the Supreme court on the 10th March 2025 and reflected in the supreme court ruling :

"319. In its helpful written case the FCA, while observing that a relationship will not be unfair merely because a commission was paid of which a borrower was unaware, has identified the following as relevant factors pointing towards unfairness. The court agrees that the factors in this non-exhaustive list will normally be relevant: the size of the commission relative to the charge for credit; the nature of the commission (because, for example, a discretionary commission may create incentives to charge a higher interest rate); the characteristics of the consumer; the extent and manner of the disclosure (including by the broker insofar as section 56 is engaged); and compliance with the regulatory rules."

Clydesdale leaning on FSMA Principle 8 (managing conflicts of interest fairly) contrasts significantly with the later SC ruling [280] "When the court put an example of this to Mr Weir, he submitted that in a case where the proffered finance package proved to be unacceptable (or unaffordable) to the customer, the dealer would be released from its stage two fiduciary obligation of loyalty to the customer, to enable it to resume an arm’s length commercial negotiating position. We regard that analysis as commercially and legally unrealistic. In our view the dealer remains a separate player in the negotiation from start to finish, free to pursue its own interests at arm’s length from the interests of the customer, subject only to the usual common law constraints (eg against misrepresentation), and to such regulatory constraints as may from time to time be imposed."

Supreme Coury 1 Aug 2025 : "free to pursue its own interests at arm’s length from the interests of the customer"

DCA, tick, errr.... no.

Commercial tie, tick, errr.... no.

Think the propose redress scheme tick boxes are equitable ?

TACO Popcorn.... munch.... munch...

Just ask him why Wrench (DCA, DiC type, financed plural nonsense interpretation under Clydesdale) was ruled fair at the Supreme Court level and the FCA now determine that Wrench was unfair in stark contrast to the Supreme Court. This is part of the point I was trying to make as to what the Supreme Court can do, which other courts lower down can't do, namely take into account other factors.

Ask how a larger flat rate commission post 2021 rule change (Technocal annex data) is considered fair when cases like of Wrench with a much smaller DCA based commission is unfair according to the FCA.

Skip the Johnson distraction, focus on the Wrench implication.

Wrench was [40] "TT would receive as commission 80% of the difference in charge between the lowest rate and the agreement rate. In addition, it would receive a commission of 1.25% of the total advance." - exactly the type that would fail Clydesdale (FCA application), but the SC ruling was after Cyldesdale (FCA ignores Supreme Court).

Wrench (2017 loan) commission was £408.98 on £8,750 loan over 48 months, which if it was a flat fee would be considered fine as it would be below the 35% / 10%, but it's a pre Supreme Court ruling Clydesdale application by the FCA that interprets it as unfair. The £408.98 commission is fair as long as only one party recieves it according to the FCA when they apply Clydesdale (issue was over plurality), which the Supreme Court saw and had no issue with for a 22% commission on interest cost rate equivalent.

From the Supreme Court ruling [264] "The FCA also explained that it did not treat a customer as vulnerable merely because he or she required car finance. As section 1C(2)(a)-(d) of FSMA, which we have set out in para 254 above, shows, Parliament has provided that the FCA in considering the appropriate degree of consumer protection in its regulation must take into account the different levels of transactional risk, differing degrees of experience and expertise of consumers and the general principle that consumers should take responsibility for their decisions." - does the FCA still hold this view ? How do the FCA then treat every DCA retrospectively as unfair, even before some of those parliamentary guidelines were given to the FCA (pre 2014) ?

[269][279] Supreme Court ruling that viewed the process (car and finance) as a single transaction should also be noted in terms of the multiple components of the commission calculation for a DCA (or any other type of multi part calculation to determine a commission split between parties - wider industry beware) where the commission is a singular value forming part of the single transaction. There are no separable parts, multiple commissions.

[265] if is marked in italic to make a point " disclose the amount .... if the customer requests"

Just my guesses, errors, an extract from the CoA/SC Hopcraft rulings, do your own homework, think, etc.

Late details matter for the choice of popcorn... munch... munch..

Seen where the shares ended up at the close, with 2.7m volume going through on the day. This is the market, logical and illogical all rolled up into a perception the market knows best when it's more comparable to the wild west. The Lloyds and CBG RNS announcements have just added a perception of uncertainty (when read shallow) into a market where seemingly nobody has a clue (analysts making comments that Lloyds will need to release £300m of provisions only for Lloyds to slap that view in the face). The statement from CBG is being read to assumed that the FCA will be able to implement a scheme that is clearly not in alignment with what a court would award.

Citadel added 0.09% to their short yesterday and will have been back slapping at todays close. The short position changes today will be quite interesting to see at tomorrows close. My thought on the plausible sellers may well be those that are seeing longer term residual uncertainty (future legal cases rather than a quick redress) and everyone else flushed out through emotions and stop loss limits. Looking at the weather forecast there are blue skies (17C) tommorrow so should be a nice day either way.

The 'if implemented in its current form' reference is a subtle counterbalance to 'a material increase' and at this stage the legal options are limited because you can't really chellenge a consultation process before it ends or the final redress scheme is proposed. The rollercaster ride just got interesting again, however it still ends up in the same place and there are just more screams along the way. The process will take time, while everyone runs from one side of the ship to the other.

What may turn out to be far more critical and influential in the whole process may well end up being the House of Lords committee meeting (timing may well be everything in this instance) and the implications of the treasury deciding if they want to go to war with the bond market or not (bank tax). [apply tin foil hat] In terms of the House of Lords committee hearing this could end up with accusations that the FCA have performed an abuse of power and openly lied to parliament. This could be far more fatal to the FCA than the redress scheme. [take off tin foil hat].

CBG was too small for the prior bank tax to apply, is still too small and you can't tax a loss.

Mind the gap (496-494).

Just some more guesses and errors, do your own homework, think, research, etc.

Rollercoaster scream on the rise and scream on the fall, careful not to spill the popcorn... munch... munch...

Just my view with the tin foil hat, etc.

CMC redress scheme overlap ends up with the CMC's possibly charging the customer an excess fee to withdraw from the CMC or still have to pay the CMC even if they get something via redress. That's something the FCA know and are having difficulty with because of future blowback on why the FCA were so bad at managing the whole situation. Why so late to advertise around not going to CMC's when the FOS route exists and even then advertise when a redress scheme is not guaranteed and that Limitation Act s32(1)(b) issue in the background.

The FCA may end up trying to go route 55, which allows them (at the moment) to go full outside of the courts and is what Bluecrest are heading to the Supreme Court over. That would be massive overeach if it was applied to the industry as a whole because it would be a clear abuse of power to bypass 404 because the redress is not legally in alignment with what a court would award. It may well be the last chance salloon before getting fired.

CMC's may end up adding additional redress pemium to deal with the redress process bypasssing them as a payment path (the FCA want the lenders to interact with the customers directly - no CMC in the chain). Then the CMC's potentially face the issue of chasing for fee's from quite a lot of people.

I'm sticking with the legal focus as to what and where the FCA face issues because everything else is very subjective and the FCA's response to the consultation responses is not going to be unbiased at all. People will complain, yell unfair, etc. all just noise in the end, nothing will happen with 90% plus of the responses, hot air out of an open window.

Where it will matter is with vey pointed issues on critical weaknesses within the process, but the FCA are trying to play 5d chess and seemingly making some interesting mistakes.

I have not looked at the legal issue side on the challenge, however as I understand it the initial challenges would halt a redress scheme where it is challenged under a 404 clause on court alignment. The FCA (and the regulated industry as a whole) would face a massive reputational issue if they pushed a scheme through with payments that the courts turned around and said were actually illegal. This is where I think the whole issue around the Limitations Act application is the major fault in the process and the redress scheme as it stands.

As a guess with errors I would with a tin foil hat be 80% confident that 2007-2014 will not face redress because it lacks clear legal authority and is only being sustaned as a premise to suspend and extend the claims window, which is an abuse or power. Tin foil hat reminder.

Don't forget, any delay with a 1% interest rate premium (2.09% avg) is far cheaper than any financing a company gets and is greater than the ROE. Delaying any payouts is not as bad as you may think. With 8% it was different.

Just my guesses and errors, do your own homework, research, think.

Popcorn time... munch..

Big disclaimer - this is my tinfoil hat view, lenders and other need to challenge to head off other issues.

After having a part read through the scheme my conclusion is that the FCA are in trouble. From the commons committee meeting some things are starting to make more sense in relation to the 2007-2014 time period. I believe that the FCA lawyers are uncomfortable with the situation and are being pushed into a direction I'm not sure they would do if it was thier own choice. The Q8/9 that covers the issue around the limitations act would not stand up in even a lower court as it is laughable that they can consider "partical disclosure" in the same paragraph as a law dealing with "deliverately concealed" facts. Nowhere in any FCA or FOS rule does it stipulate that the nature of the commissions should have been disclosed in the timeframe 2014-2021. More so there was no CONC rule prior to 2014 for Clydesdale that would allow the FCA to justify 2007-2014 redress. That timeframe I believe is a legal issue that is approaching some people getting fired if they want to try and take it into any type of court to try and explain how partial disclosure is actually a deliberately concealed fact.

Separate to this is that the redress is not in alignment with a court award, when considering the type of redress that was awarded in relation to PPI, where it was the excess commission above 50% that was awarded. The full commission redress in Johnson was only awarded because a combination of factors, namelely the documentation errors (negated disclosure), the commercial tie (conflicts / broker), the outright documented lie (pannel of lenders vs commercial tie) and last of all the size of the commission (on it's own was not necessarily an issue).

The FCA seem to have framed a lot of the questions in the consultation with a clear bias as to what they want people to focus on and the direction of the answers, just look at questions 8 and 9 that do not even consider S32(1)(b) and redirect.

This is all separate to the issues in the Clydesdale ruling, which in my mind is comparable to the half secret fiduciary nonsense. Jenricks 30 judges plus one.

Market analysts just go off what they can find and derive from the same (on the whole) information everyone on here has access to. The difference is how long they take to think of an answer or how deep thier research and guesses go. Nobody has the whole picture (even the FCA - they made the 30m record data set up) and nobody can ever know the whole picture. What everyone misses is that your all competing against people with partial knowledge, your not competing with an imaginary perfect information know all entity. That's how you view the market.

Legal challenges are ahead. Buckle up for the rollercoaster and what may turn out to be a great show on what not to do (the FCA playing the prime role).

As always, just my guesses and errors. Do your own homework, research, think, etc.

Popcorn reserves active.... munch... munch..

Separate interesting point, in Technical Annex 1 - 153 pages

1.101 "Prior to the DCA ban, the average broker commission for a DCA agreement was £747 (weighted average of increasing DiC, reducing DiC, and scaled commission models), and the average broker commission for a flat fee agreement was £268.11 Following the DCA ban, the average broker commission for a flat fee agreement increased to £706, which could be due to the compositional effects of the market transitioning from mostly DCA agreements to mostly flat fee agreements (see the figure below)."

First point is how the FCA can say that £700 is the average redress, when average DCA commission was £747. [1.27] "Our estimation of loss is typically lower than the commission paid". When framed in the difference between the flat fee and the discressionary value the £700 looks questionable as to "loss" because the FCA appear to be applying full commission redress on the majority of cases regardless as to the interest rate the agreement had. Regardless if it was changed by the broker ? This does not seem to make sense and contradicts the FCA's own comments relating to brokers not operating on zero commissions.

Second point is the flat fee moving up to compensate for the prior commission makes the whole process of CONC rule changes look a bit pointless if the market operates in a commercial competitive manner as the fee changes would appear to signal. The post ban £706 flat fee makes the £700 redress average look quite inconsistent.

The consultation questions seem to have been framed with a bias towards redress and not necessarily a fair balanced set of consultation questions. This whole process is just seems like depressing economic and commercial illiteracy by people who have already cause billlions in losses to the treasury and the economy as a whole.

Source : https://www.fca.org.uk/publications/consultation-papers/cp25-27-motor-finance-consumer-redress-scheme

As usual, just my guesses and errors, do your own homework, think, research.

Enough popcorn... munch.... munch...

4.34 Our analysis, which is set out in our Diagnostic Report, has identified that the most common form of disclosure relating to these features made by firms (if any) was a partial disclosure that “commission may be payable”. We do not consider that such wording, or a similar partial disclosure such as commission “would be payable”, would normally be sufficient for lenders successfully to argue that that the consumer cannot rely on s.32(1)(b)."

Limitations Act 1980 Section 32(1)(b) "any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant"

Can someone please explain how "partial disclosure" is translated to "deliberately concealed" when presented to the consumer in a document they signed ? The Supreme Court also rebuked the secret nonsense with clear legal case history on "may be" is the cat out of the bag moment on concealment and secrets. The FCA are dreaming if this is not going to be challenged.

Question 8 and 9 completely miss any challenge as to the FCA complete bending of Limitation Act clause 32(1)(b) on "deliberately concealed" partial disclosure nonsense. This read exactly like the half secret fiduciary nonsense. Talk about framing questions to only get your own result and not to consult on all the relevant matters.

If lenders (and other industries - Clydesdale has other implications) do not push back on this it will backfire on them big time in the future. I'm surprised that the FCA can write these type of points and expect them not to have a massive negative impact upon the supposed regulatory economic growth targets. Come do business in the UK, our regulator will reinterpret any law to punish you years after they made separate rules you also followed to the letter because it was not in alignment with a vauge worded principle that contradicts a different principle that the consumer should take responsibility for thier own decisions.

More guesses and errors, do your own homework, think. Don't trust, research,

Framed question of popcorn... munch... munch...

2.8 - presenting CONC 4.5.3R wording from 2021, ignoring the 2014 version had different wording.

Critically prior to 2014 CONC 4.5.3 did not exist, which is a little problematic because Clydesdale rests on COCN 4.5.3R and therefore the FCA can't use the same legal ruling that rests upon a rule which did not exist at the time.

The whole issue of 2007 to 2014 is an issue over the Limitations Act and the FCA suspending concumer rights (commented in the house of commons committee meeting). The Clydesdale ruling can't apply prior to 2014 because the rule did not exist and since 2014 it existed in a manner that also allowed the complete non disclosure of commissions.

The 11.13 extension to 31 July 2026 may be a bargaining chip to avoid an issue over 2007-2014 cases as well because it would keep the clock frozen from the perspective of the Limitations Act and that the issue has been in awareness since 2019 ?

In terms of ongoing cases if a redress process were not to happen, then Clydesdale would need to end up challenged either directly or on the grounds of limitation to remove pre 2014 cases. The rest of Clydesdale in one sense reads like Hopcraft and may be more in line with Jenericks perspective of 30 judges that need firing. Where the courts create confusion (judges ruling contradictory to prior well established law - e.g. fiduciary out of a hat) then that just leaves the door open to more claims and the claims will never stop regardless.

Clydesdale has implications across other industries and this has not been mentioned yet, which makes the insurance market and any other market with a commission payment formula liable for FCA action over not enough disclosure and FOS principle breaches. This will be used in years to come until it is challenged and overruled. Maybe Barclays viewed abandoning the legal case as a commercial opportunity to create chaos (legal claims and redress) and weaken competition ?

My thought would be that the DCA claims should be scaled back to low single figure millions because to effectively include Wrench back into redress would appear to make the Supreme Court blind or useless, which in my mind reflects on the legal system as a whole. Justice should be blind to the application of the law and not blind to the law itself.

That said I do wonder if the lenders are daft enough to trust the regulator without reflecting on how PPI turned out for them. I doubt they will allow for redress in it's current form to proceed. Read some of the point in more detail because they have serious issues.

To agree to 2007 to 2014 would effectively be to agree to a ruling in 2025 based on something that did not exist until 2014 at the earliest. Even then the 2021 to 2024 rabbit out of the hat would appear to be an issue.

Will see what happens in morning given it is no great surprise in some regards, just an uncertainty to certaint shift.

Again, just my guesses and errors, do your own homework.

Sitting back with ther popcorn... munch... mu

I made an error on initial reading of the 35%.

Reversing back on 1.21 (b) high commission arrangement (where the commission is equal to or greater than 35% of the total cost of credit and 10% of the loan).

Consider a £7,000 loan (CBG Avg 2021) at an APR of 12.3% (5.5% fixed) over 2 years (CBG loan average duration before CoA and last report is around 18 months) with an interest element that works out to be £881.43. Would allow a (10% of the loan) commission max of £700 under the filter criteria. Then apply the 35% and you get a commission filter level of £308.50.

Then consider Hopcraft in 2014 where the commission was £183.26 over 11 years ago and factor in any sort of inflation figure remotely close to what the UK has experienced. Granted Hopcraft was on a loan of £8,280 [29] at 12.3% APR.

Then consider the Wrench case with £8,750 loan over 48mth at 10.2% APR with the commission paid of £408.98, where the interest was £648.32 and the 10% would have been £875. This would be below the 35% calculation filter but because it is a DCA it falls under (a) which makes the 35% a false high bar of an unfair relationship, when considering the FCA's later point on Johnson.

Now consider the (1.26) Johnson contradiction where "50% of the total cost of credit and 22.5% of the loan. These cases will be relatively rare." so, DCA cases are treated completely different to instances of a hidden commercial tie (Supreme Court finding). That seems like a purposeful argumentative difference to get responses arguing about what level is acceptable and not that the commission is being deemed unfair in the first place. Distraction tactic very similar to the bribery route trying to detract from the fiduciary out of a hat ruling.

Clydesdale has one critical aspect, which the FCA is resting on, that is the commissions plural argument without holistically reading the reading of 4.5.3R "commissions" in plural and the listing of the types of commission.

Will continue reading and thinking, however the FCA approach seems contradictory and if ground 1 (disclosure) in Clydesdale is challenged it has a very good chance of overruling it. The Clydesdale case also tries to make the point that if commission = part A + part B then that is two commissions, even though commercially part A and part B can't be separates as they form part of a singular transaction (singular payment of a commission).

I can't see the FCA proposal being implemented without a significant challenge.

Quick google and used first listed API calculator : https://moneyfactscompare.co.uk/loans/loan-calculator/

Just my guesses and errors. Do your own homework, think.

Fiduciary hat full of popcorn... munch... munch...

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