Barclays faces setback as High Court upholds FOS's commission claims ruling

Judges upheld the Financial Ombudsman Service’s (FOS) original findings, which stated that the complainant – who bought a used car on finance in 2018 – could have paid a higher interest rate due to an undisclosed commission arrangement with the broker.

The dispute arose in December 2021 when Ms Lewis complained to the FOS about her treatment when purchasing a second-hand Audi from Arnold Clark in November 2018. She was not informed that her loan agreement included a commission payment worth almost £1,600 – with the Ombudsman upholding her complaint.

Explaining their decision to rule against Barclays – which launched a judicial review against the decision in April – Judge Timothy Kerr said: “The customer’s borrowing costs are increased by the broker’s choice of an elevated interest rate. That is so whether or not, in the self-serving view of the lender and the broker, she is more than compensated for that by other features of the transaction.”

In response, a Barclays spokesperson said: “As we have previously stated, this challenge related to a single, specific case on which we disagreed with the Financial Ombudsman Service’s decision.” The spokesperson added, “We are disappointed in the court’s ruling and will be appealing.”

This comes just a month after the Financial Conduct Authority (FCA) announced an extension for firms to respond to consumer complaints across the industry until December 4, 2025.