The monthly round-up of news, guidance, legislation, and case law from Shelter's Specialist Debt Advice Service.
News and legal updates
This month's legal round up includes DRO guidance on motor finance discretionary commission, and a resource for economic abuse survivors.
How outstanding motor finance complaints are treated in a DRO
The DRO Team has provided guidance on motor finance complaints and potential compensation.
Where a client has an outstanding complaint which might result in compensation, this may need to be declared as an asset on a DRO application as it is a ‘right of action’.
The DRO Team has previously said that ‘where proceedings are in their infancy and the claim is somewhat speculative and the value of the same has not been determined then the debtor would not be precluded from applying for a DRO.’ In this case, ‘the right of action should be noted on the DRO application but as no value has been established it would not be scheduled as an asset.’
The FCA has extended the current pause to the time firms have to respond to consumers about motor finance complaints involving a discretionary commission arrangement. It is unclear what the outcome will be for clients who have made a complaint and have not yet received a response, for example whether they will receive any compensation and how much it might be.
The DRO Team has confirmed that a complaint about car finance discretionary commission will not be classed as an asset until the client has received confirmation that they are entitled to compensation. They have asked that Approved Intermediaries provide information about the complaint when the DRO application is submitted.
Economic Abuse Evidence Form rollout
Surviving Economic Abuse has rolled out the Economic Abuse Evidence Form (EAEF) to financial service firms, following a successful pilot. The EAEF is used to support victim-survivors of economic abuse who have debts.
Debt advisers that have been trained by Money Advice Plus and Surviving Economic Abuse can complete and submit the EAEF to creditors. A dedicated EAEF hub with information for firms will be available in 2024.
Case law
Find debt case law summaries by topic on Shelter Legal.
Bankruptcy proceedings in breathing space
The High Court refused to annul a bankruptcy order based on a debt subject to a breathing space moratorium.
Carter v Davies [2024] EWHC 1536 (Ch)
Penalty charge notices
What are your client's next steps when they first hear about enforcement of a Penalty Charge Notice following a visit from the bailiffs?
Kate Cook and Syedur Rahman from Shelter's Specialist Debt Advice Service explore options to challenge a parking or road traffic charge when the deadline has passed.