Channel Islands clarify motor finance complaints process amid UK redress scheme confusion
- CIFO clarifies that UK motor finance redress scheme does not apply to Channel Islands consumers
- Channel Islands have no statutory compensation scheme equivalent to UK system being established
- CIFO can review motor finance complaints and award compensation up to £150,000 where merits exist
- Consumers must first complain to lender or dealer, waiting three months before escalating to CIFO
- Organisation offers free, impartial service for resolving financial services complaints in Jersey, Guernsey, Alderney and Sark
The Channel Islands Financial Ombudsman has issued a statement clarifying the rights available to consumers who took out motor finance in the Channel Islands, following confusion caused by recent coverage of UK compensation schemes.
The organisation emphasised that the Channel Islands — comprising Jersey and the Bailiwick of Guernsey — do not have a statutory compensation scheme equivalent to that being established in the United Kingdom.
The redress scheme being implemented by the UK Financial Conduct Authority for UK consumers of motor finance does not extend to consumers in the Channel Islands.
However, CIFO confirmed it can review complaints from Channel Islands consumers about motor finance agreements made through auto dealers with financial service providers based in the Bailiwicks of Jersey and Guernsey.
Motor finance complaints provided in the Channel Islands fall within CIFO's statutory remit. Where complaints are found to have merit, the ombudsman can award compensation for losses up to a maximum of £150,000.
Consumers must follow a specific process before bringing complaints to CIFO. They should first contact the provider of their loan, the car dealer that arranged the financing, or the actual lender directly. These parties must be given the opportunity to resolve the issue before CIFO involvement.
If consumers remain dissatisfied with the outcome, or do not receive a response within three months of raising their complaint with their dealer or lender, they can escalate the matter to CIFO for independent review.
The ombudsman will investigate the complaint and seek an informal resolution between the consumer and provider. If no agreement can be reached, CIFO will make a final decision on the complaint.
In determining any compensation owed, CIFO stated it will have regard to what is fair and reasonable in the circumstances of each case.
The Channel Islands Financial Ombudsman is an independent statutory organisation that resolves complaints about financial services provided in or from the Channel Islands of Jersey, Guernsey, Alderney and Sark. The service is free and impartial for consumers and small businesses.
Further guidance about CIFO's complaint process is available on the organisation's website.
Q&A
Q: Does the UK motor finance redress scheme apply to Channel Islands consumers?
A: No, the redress scheme being established by the UK Financial Conduct Authority for UK consumers of motor finance does not apply to consumers in the Channel Islands.
Q: How much compensation can CIFO award for motor finance complaints?
A: CIFO can award compensation for loss incurred up to a maximum of £150,000 where complaints are found to have merit.
Q: What must consumers do before bringing a motor finance complaint to CIFO?
A: Consumers must first contact their loan provider, car dealer or lender directly, giving them the opportunity to resolve the issue. If unsatisfied or without response after three months, they can escalate to CIFO.
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