Britain’s financial complaints watchdog is reported to be challenging Barclays‘ attempt to overturn a key ruling in the motor finance “mis-selling” scandal.

The Financial Ombudsman Service (FOS), which adjudicates customer complaints, is opposing Barclays’ application for a judicial review of its decision.

Barclays is currently seeking a judicial review of the FOS ruling that it treated customers unfairly regarding discretionary commission arrangements (DCAs).

This landmark decision, issued in January, initiated an ongoing investigation into the motor finance sector, significantly impacting the industry.

According to the FOS, a customer, identified as Miss L, was unaware that her payment package included a £1,600 commission to a credit broker — the dealer from whom she purchased the vehicle.

The Financial Conduct Authority (FCA) subsequently launched a market-wide inquiry into potentially unfair vehicle loan deals made before January 2021, when the regulator banned the practice.

Barclays’ request for a judicial review would involve the High Court examining the lawfulness of the FOS decision. The watchdog is contesting this application.

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