Discretionary Commission Arrangements - Compaints 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.


Moneybarn, (the trading style of Moneybarn No. 1 Limited) established in 1992, is one of the UK’s leading lenders of specialist car, motorbike and van finance in the sub-prime market. It is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry.

Moneybarn became part of the Provident Financial group in 2014, which also includes Vanquis Bank and Provident Personal Credit, all of which operate in the sub-prime market.

Provident experienced a £113.5m pre-tax loss in 2020, with £74.9m losses in the home credit division alone. In contrast, Moneybarn brought in a pre-tax profit of £10.9m. Saying that, in February 2020, it was revealed that Moneybarn had been ordered to pay out nearly £33m over its mistreatment of customers. If you believe you were mis-sold or mistreated by Moneybarn, please read on.

It is interesting to note that, while COVID 19 has seen many lenders in the sub-prime market stop lending, lend less or even close, Moneybarn have been thriving! When public transport was no longer a viable option for commuting or getting around, the need for vehicle finance increased across the UK. During the UK lockdown, Moneybarn recorded its highest number of new customers ever recorded in a single month!

So how does vehicle finance lending work?

The company (lender) provides the borrower with the finance they need, and pays the amount borrowed direct to the dealership chosen by the borrower, for the vehicle the borrower wants, provided it fits the company’s lending criteria. Moneybarn offers vehicle finance to those who are unable to get a loan from a bank or other mainstream high street lender due to their financial situation; they will lend if you have a poor credit score or history, or even a CCJ (County court Judgement). Equally, those who are self-employed or just wanting to build their credit score are also invited to borrow.  

Of course, you will pay handsomely for the privilege of borrowing from Moneybarn. For example, if you wanted to borrow £10,625 over 57 months (4.75 years), you would pay £341.92 monthly for 56 months, which works out at an astounding repayable amount of £19, 147.52!

Is the finance agreement Hire Purchase or Conditional Sale?

Moneybarn uses a Conditional Sale agreement for their vehicle finance. In essence this means that the borrower has full use of the vehicle throughout the term of the agreement, and the vehicle is also registered in the borrower’s name. However, the vehicle is not owned by the borrower until the last repayment has been made.

Moneybarn claim that there are several advantages to this method of finance - there is no requirement for a large up front sum, or a lump sum at the end of the agreement, payments are fixed for the length of the agreement, there is no “option to purchase” fee (which a hire purchase agreement will have), and finally, that the borrower may opt for Voluntary Termination, whereby they can hand the vehicle back once half of the repayable amount has been repaid.

Disadvantages of a Conditional Sale agreement are that the finance is secured against the vehicle, so if the borrower fails to meet the monthly repayments, the vehicle can be repossessed. Fundamentally, monthly repayments are likely to be higher in comparison to a Hire Purchase agreement.

Complaints and criticisms about Moneybarn

Many customers of Moneybarn, (and other similar vehicle finance companies) have complained that they failed to check that the loan was affordable to the borrower, and that they did not make sure that the borrower was likely to be able to make the repayments for the duration of the loan.

What is meant by “affordable”?

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 have a different rationale – 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.

Many borrowers prioritise their car finance repayments as the vehicle is necessary for their job – this in turn can mean that they have increasing credit card balances or need to take out further loans to pay household bills. So, if the car loan is up to date, to the detriment to the rest of the borrower’s finances, it is 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. The BBC ran a story ‘Car payments are ruining our lives’, wherein one 23-year-old student with a part-time job was sold a £21,000 Audi on finance, with apparently no affordability checks at all! It is more likely that a quick and inadequate check was done, however.

Some Moneybarn 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; 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 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.

These complaints may take many months. You will have to keep up the loan repayments during this time, or your car may be repossessed.

If you have had problems paying your loan, or you think you have been mis-sold a loan, then you could be entitled to a refund and/or compensation. Equally, if you feel that you have been treated unfairly, for example if your financial circumstances changed and Moneybarn did not try to help you in any way, contact Redbridge Finance today by going to www.redbridgefinance.co.uk, sign up, and we can assess if you have a claim.