Moneybarn No.1 Limited · DRN-6200739

The complaint Mr S complains through a third-party representative that Moneybarn No.1 Limited (“Moneybarn”) acted unfairly when he entered into a conditional sale agreement with it. Mr S says Moneybarn failed to disclose commission it paid to the broker and this created an unfair relationship. What happened Mr S entered into a conditional sale agreement with Moneybarn to acquire a car in September 2017. The cash price of the car was £7,270 and Mr S paid an advance of £100. Moneybarn lent Mr S £7,170 and charged interest of £7,132.78. Mr S’ agreement was for 60 months with monthly repayments of £242.42. When Mr S complained to Moneybarn he also complained about Moneybarn’s decision to lend in addition to the complaint about commission. Moneybarn didn’t uphold any part of his complaint. So, Mr S referred his complaint to the Financial Ombudsman Service. Mr S’ complaint was considered at investigator stage and wasn’t upheld. Mr S disagreed and asked for an ombudsman’s decision. Mr S said the commission amount was high compared to his disposable income and this created an unfairness. Mr S’ complaint about Moneybarn’s decision to lend has been considered separately and this decision only addresses Mr S’ complaint about the commission payment. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having carefully considered everything, I’ve decided not to uphold Mr S’ complaint. I’ll explain why in more detail below. In the joined cases of Hopcraft, Johnson & Wrench1, the Supreme Court considered how the law applies to motor finance commission related claims. Broadly speaking, the Supreme Court concluded that the relationship between a motor finance lender and a consumer could sometimes be unfair to the consumer (under Section 140 of The Consumer Credit Act 1974 (“S140 CCA”)) in circumstances where neither the credit broker nor the lender disclosed that: • there was a discretionary commission arrangement (“DCA”) – an arrangement where the commission paid was linked to the loan interest rate and the broker had the discretion to set a higher interest rate to receive more commission. 1 Hopcraft and another (Respondents) v Close Brothers Limited (Appellant); Johnson (Respondent) v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance (Appellant); Wrench (Respondent) v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance (Appellant) [2025] UKSC 33

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• the credit broker would receive a high commission relative to the cost of credit or amount borrowed. • the credit broker was required to select the lender in preference to other lenders the credit broker could offer. This is sometimes referred to as a commercial tie or a right of first refusal. Moneybarn has provided information to show that Mr S’ broker received a fixed commission payment of £450. The terms of agreement between Moneybarn and the broker was such that Moneybarn would pay commission for each customer it introduced. The crux of Mr S’ complaint is that he was unaware of the commission payment and this resulted in an unfair relationship under s140A of the Consumer Credit Act 1975 (“CCA”). While I haven’t seen persuasive information to show that the commission was disclosed to Mr S, on balance I’m not persuaded, and I think it is less likely than not, that a court would find that the commission payment of £450 here rendered the relationship between Mr S and Moneybarn unfair. I say this because: • the commission of £450 did not involve a DCA, so the credit broker did not have discretion to set Mr S’ interest rate. • I think it less likely than not that a court would consider the £450 commission payment to be high when compared to the amount Mr S borrowed, or the cost of the agreement Mr S entered into. I think it unlikely that this commission of £450 would have been a major consideration in Mr S’ mind, had it been disclosed to him at the time of entering into the conditional sale agreement, when the commission payment represented around 5% of the amount he borrowed and around 6% of the total cost of the credit. • I think it less likely than not that a court would consider that a commercial tie existed between Mr S’ credit broker and Moneybarn. In reaching this view, I have reviewed a range of contracts and agreements that Moneybarn had with various brokers over several years. I have seen nothing in any of these agreements indicating that Moneybarn had contractual ties with any of the credit brokers that it worked with. I consider this to be consistent with Moneybarn’s position within the market as a lender serving customers that typically find it difficult to obtain credit from more mainstream lenders and have less choice as a result. I have also taken into account Moneybarn’s published market statement about it not operating commercial ties. In this context, I’ve not seen anything to support an argument that a commercial tie existed between Moneybarn and the credit broker. I note that Mr S said he had poor credit, was in debt collection and was repaying multiple debts. As stated above, Moneybarn’s position in the market is such that it lends to customers who find it difficult to obtain credit from mainstream lenders and so have less choice. In these circumstances, I think it is less likely that Mr S’ knowledge about the commission at the time would have been a key consideration in whether he entered into the agreement. This is particularly the case as the commission wasn’t a DCA and there was no clear link between the interest rate Mr S received and the commission payment to the broker. Overall, I haven’t concluded that the commission payment of £450 by Moneybarn to the broker in this case means that it failed to act fairly and reasonably towards Mr S. So, I won’t be asking Moneybarn to take any steps to put things right for Mr S.

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I appreciate that my decision will likely disappoint Mr S, but I hope my explanation helps him understand why I’ve reached these conclusions. My final decision For the reasons given above, I don’t uphold Mr S’ complaint or make any awards against Moneybarn No.1 Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 21 April 2026. Oyetola Oduola Ombudsman

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