Discretionary Commission Arrangements - Complaints and Refunds

You do not need to use a Claims Management Company. You can make the claim directly to the lender and if they reject your complaint you can take it to the Financial Ombudsman Service free of charge, but you must do this within 6 months of the lenders Final Decision Letter.



Billing Finance was founded in 1983 by James Mackaness, and is based in (and named after) Great Billing, Northampton. Billing Finance is authorised and regulated by the Financial Conduct Authority. It is a privately run, family-owned vehicle finance company, but at its inception, was a general asset finance company. Billing Finance moved from general asset financing to vehicle finance, albeit only locally, in 2006, and in 2013, the company entered the motorbike finance market. In 2016, it expanded its coverage and offered vehicle finance nationwide to all customers. Billing Finance now finances cars and motorbikes, as well as light commercial vehicles and leisure vehicles.

Car Finance.

It is somewhat surprising that, given the financial pressure of the ongoing cost-of-living squeeze, in 2022, more than 2.2 million drivers signed car finance agreements, an increase of around 3% on 2021, and a new record for car finance borrowing. The total car finance borrowing for 2022 soared to a staggering £40.7 billion, an increase of £4 billion compared to the previous year, according to the FLA (Finance and Leasing Association). As these figures demonstrate, car finance is big business, and used car finance is a rapidly growing sector – not hugely unexpected then that used car finance complaints have seen an exponential rise in the last couple of years, with many car finance loan companies paying out thousands in refunds and compensation.

In April of this year, the Financial Ombudsman Service (FOS) declared that in the 2022-2023 financial year, they received 11,452 complaints about car finance loans, up 87% on the previous year (and this is where complaints end up if the customer or Claims Management company representing the customer is not satisfied with the loan company’s response to their complaints, so the true number of complaints is much higher). Car finance is, according to the FOS, the third most complained about financial product after bank accounts and credit cards.

Although most car finance companies offer several different car finance products, the most common being hire purchase (HP), personal contract purchase (PCP), conditional sale and lease purchase, Billing finance only offer Hire Purchase, so I will focus on that in this article.

Hire Purchase is perhaps the most familiar type of car finance to many, as it was the most popular way of buying a car before the introduction of PCP schemes, and is possibly the simplest to understand. Typically, the customer pays a deposit (usually this is a minimum of 10%), and then pays off the remainder of the value of the car in monthly instalments (lasting anywhere from 12 months to 60 months), with the car used as security for the loan. This does mean that the customer does not own the car until the very last payment has been made.

Advantages of Hire Purchase.

  • Easy to budget as payments are monthly and do not fluctuate, (so interest rate is fixed) and flexible (from 12 months to 60 months).
  • Only 10% (minimum) deposit required.
  • When half the cost of the car has been paid off, you may be able to return it and make no further payments.
  • If your credit score is not great, it’s probably going to be easier to get a HP deal (compared to an unsecured loan) as the car is used as collateral for the loan.
  • An HP agreement doesn’t generally come with any mileage restrictions – a major difference to a PCP.
  • You do not need to find a large amount of cash at the end of the agreement (balloon payment, as with a PCP) to call the car your own; the final fee is usually small, perhaps £100-£200.

Disadvantages of Hire Purchase. 

  • The size of the deposit, along with the term length affect the monthly payments. The smaller the deposit, the higher the monthly payments are likely to be. Equally, the shorter the term of the loan, the higher the monthly payments will be.
  • You do not own the car until the very last payment has been made, so, if you were to experience financial difficulties and default on the payments, the finance company are within their rights to take the car away.
  • You cannot sell or even modify the car over the term of the contract (unless permission is sought and given).
  • Hire Purchase is typically more expensive than a PCP or leasing.
  • Until you have paid at least a third of the total amount payable, the lender can take back (repossess) the car at any time if the account falls into arrears, without the need to obtain a court order.

More about Billing Finance, Complaints, and why you should be cautious.

So, Billing Finance declare that they “keep it simple” by only offering HP finance deals, and state that most of their customers apply for one of these deals through a network of trusted brokers. It seems that they encourage consumers with “non-standard” credit profiles – for that read bad, I assume – to apply, as they claim to “focus” on customers who may not be accepted by the automated underwriting process of other lenders. Billing Finance assess your ability to pay using both automatic and manual underwriting means, so I suppose they are offering a more personal service in this respect. They are proud of their simple pricing structure; they list the basics of their schemes which fall in line with the standard pros of hire purchase, so for example, fixed interest rates mean fixed monthly payments, no “balloon” payments, option to buy the vehicle at the end of the term, no excess mileage charges etc. Pretty standard features of hire purchase in my opinion. They also take payment by Direct Debit, again, nothing unique here, and they lend from between £2000 and £25,000, over agreements periods of between 36 and 84 months; seven years is a relatively long agreement length, as on average most lenders in the UK offer contracts ranging from three to five years. Obviously, the longer the term of the agreement, the more interest you pay, but the monthly payments are lower, so maybe this suits Billing Finance’s customers, but I can appreciate that this is why there are so many complaints about the costs of borrowing from them. This leads nicely into me divulging the details of the Representative example on their website – 

Total amount of credit £11,295.00. Repayable over 60 months. 59 monthly payments of £320.12, and a final payment of £321.12 (that is the option-to-purchase fee of £1). Representative 25.9% APR (fixed). Deposit of £1,400. Total charge for credit £7912.20. Total amount repayable £20608.20.

There is not much to say about this other than that seems an incredible amount of interest to pay, but as a member of Billing Finance says in response to a customer’s review decrying the huge amount of interest he has paid, “Although our interest rates might be high (“might”? Surely that should say “are”?), we do not hide this and do not charge letter fees or late payment interest. We also offer lower interest rates to repeat customers.”

Billing Finance does state that it offers range of APRs “based on asset type, loan amount and customer credit score,” but as the majority of their negative reviews are about the exorbitant interest charges, along with the knowledge that we have about who they offer finance to, it is likely that the above example is a fair reflection of their charges.

Going back to customer criteria, and the fact that they will not turn away customers with poor or a non-existent credit record, they will even consider customers who are

not on the electoral role. They will also look favourably upon those of us who are demonstrating that we are on the right path to repairing our credit history, which is great news if circumstances beyond our control led to a poor start to our credit score!

Billing Finance does however, like most lenders, have minimum criteria, which are that you have to be 18 years of age or over, and no older than 73 at the start of the agreement, or older than 80 at the end of it. You must also have a permanent place of residence in mainland England, Wales Scotland or Northern Ireland – caravan parks are not deemed valid places of permanent residence. You can also be self-employed, and if retired, must have a regular income (presumably a pension?) and ultimately, be in receipt of a net monthly income of at least £1242.

As we know, a great many complaints about any sort of loan, including car finance, are to do with the loan or finance being unaffordable, and further on, I will go into more detail about what is deemed unaffordable. Billing Finance do claim to undertake an affordability assessment when a customer applies for finance, and also assert that they will only offer finance if they feel “comfortable” that the repayments would be affordable and sustainable. They do also put some of the responsibility onto the potential customer to be honest when deciding what they can afford now and in the future, although of course this isn’t always easy to predict. Billing Finance has, like many other vehicle finance companies such as Blue Motor Finance, Moneyway and Moneybarn to name a few, been complained about by previous and current customer’s stating that they were given finance when it should have been evident from the information provided, that they could not afford it. Other complaints that we see are that the vehicle developed a fault or faults, and the lender is unhelpful in getting the car back on the road, or that if a customer’s financial circumstances change, and they are worried that they will fall behind with payments, the lender does not listen or treat that customer fairly.

So how is a finance agreement or loan “unaffordable?

A borrower might think that if they make all their car finance payments on time, it is deemed to be “affordable.” However, the FCA and FOS both have a different principle – they state that a loan is only affordable if you can make the repayments on time, without hardship, and are still able to meet other financial commitments. So, customers should not view their car finance in isolation if they are struggling.

Many customers prioritise their car finance repayments as the car or van is essential for their job – this in turn can mean that they have growing credit card balances or need to take out further loans to pay household bills. So, if the car loan is up to date, but to the detriment to the rest of the borrower’s finances, it is deemed not affordable. Complaints have been made about vital checks such as evidence of income, credit record check and verification of outgoings not being thorough enough. Billing Finance do urge their potential customers to consider their finances and commitments before they sign on the dotted line, however, if someone is desperate for finance, and they have been turned away by multiple other companies (who have perhaps been more vigilant in their searches), then they will possibly ignore this advice, and just go ahead regardless.

Some Billing Finance customers have gone through the process of trying to get a refund, or compensation, as they were given a loan, despite having a poor credit record which detailed other recent loans, missed payments, defaults or evidence of regular gambling activity for example; if the lender had been thorough, this record would have sent alarm signals indicating that the borrowers financial position was bad, and getting worse.

Redbridge Finance has helped many customers who feel that they were mis-sold vehicle finance, based on the issues mentioned above. We can also investigate the thoroughness of checks, or as the Financial Ombudsman Service puts it, “reasonable and proportionate checks,” to ensure that the borrower was able to make the repayments for the whole duration of the loan. We can represent you and your claim that you were unable to afford the loan and if we do not agree with the lender’s decision (this being a “no” to a refund or compensation, or an offer that we feel is too small), we will then pass your case on to the Financial Ombudsman.

If you successfully claim a refund from a lender, you can claim back the interest and charges on your loans, plus, typically, 8% statutory interest

Please bear in mind that these complaints may take many months. You will have to keep up the loan repayments during this time, if applicable, or your car may be repossessed.