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Car finance industry sets aside billions for motorist claims

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Car finance industry sets aside billions for motorist claims

Motorists who bought a car on finance could share in billions of pounds in compensation following a landmark test case.

When Marcus Johnson, 34, from Cwmbran, Torfaen, bought his first car – a Suzuki Swift – in 2017, he was not informed the car dealership was being paid 25% commission, which was added on to what he had to pay back.

In a landmark case with two other claimants, the Court of Appeal ruled in October that the finance company should pay the hidden commission plus interest back to Mr Johnson, and he is now due to receive just over £3,200.

Trade Centre Wales and MotoNovo finance’s parent company FirstRand have not responded to requests for comment.

Mr Johnson said he was “furious” when he found out what had happened, adding: “I paid £1,650 for what I can only describe as showing me around the showroom for 10 minutes and then printing off a bit of paper.

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“I signed a few documents and then drove away in the car.”

He said he had no option but to use finance when he bought the car, describing it as “heart-breaking” to find out so much extra money had been taken.

“Someone in my situation at that time, not being able to buy that kind of age car with cash, you would use finance,” he added.

“And for companies to be able to be allowed to charge these ridiculous amounts of commission without disclosing it, without me being made aware of it at all, myself and thousands of other people.”

Mr Johnson had bought the car from dealership Trade Centre Wales for £4,600, and the company arranged finance with Cardiff-based MotoNovo Finance.

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He was not informed that the dealership was receiving commission of £1,650, which amounted to about 25% of the total he borrowed.

The car finance industry is setting aside huge amounts of money to settle similar possible claims in the future.

Mr Johnson sold the Suzuki Swift in 2020.

But after three years of regular payments, he still owed £3,500 which he assumed then was due to the interest on the loan for the car.

“With paying off the agreement for three years, I had only scratched the surface,” he said.

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Dealerships were not acting outside of the rules and regulations of the industry by taking this sort of commission at that time, but they had a duty to inform their clients and inform them about the commission.

The court of appeal said “burying such a statement in the small print which the lender knows the borrower is highly unlikely to read will not suffice”.

There have been changes in the rules governing commission since 2021, when the Financial Conduct Authority banned discretionary commission arrangements.

Kevin Durkin, from HD Law, who represented Mr Johnson in the test case, said: “As a financial reward for them being chosen, FirstRand Bank paid Trade Centre Wales a commission which Marcus knew nothing about.

“There was only a vague reference to this arrangement in the paperwork which the court of appeal found was buried.

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“As such it meant that Marcus paid more than he necessarily needed to.”

He added it is far from being an isolated case, with many car dealerships and finance companies having operated in this way.

“It’s completely widespread,” he added.

“Almost all cars that are purchased on finance through a dealer or credit broker are sold in this way.

“I’ve yet to see any terms and conditions in a case involving my clients where the terms and conditions reference is either absolute in terms of ‘we will receive a commission’ or alternatively is made prominent in the paperwork that is being signed.”

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Mr Johnson said he will never use a finance agreement again, but was delighted when the Court of Appeal found in his favour.

“It was a big moment of relief and excitement and obviously happiness all at the same time – especially with how tough things are at the moment,” he said.

He hopes others will also get money back. adding: “I’m so happy that my case and the decision that was made could potentially help thousands of other families, to me that’s worth more than the money that I reclaimed in a way.”

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Finance

Departing inspector general targets Council Office of Financial Analysis

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Departing inspector general targets Council Office of Financial Analysis

The $537,000-a-year office created in 2014 to advise the City Council on financial issues and avoid a repeat of the parking meter fiasco has failed to deliver on that mission, the city’s chief watchdog said Tuesday.

Days before concluding her four-year term, Inspector General Deborah Witzburg said a shortage of both adequate staff and financial information closely held by the mayor’s office prevents the Council’s Office of Financial Analysis from helping the Council be the the “co-equal branch of government” it aspires to be.

In a budget rebellion not seen since “Council Wars” in the 1980s, a majority of alderpersons led by conservative and moderate Democrats rejected Mayor Brandon Johnson’s corporate head tax and approved an alternative budget, including several revenue-generating items the mayor’s office adamantly opposed.

But Witzburg said the renegades would have been in an even better position to challenge Johnson if only their financial analysis office had been “equipped and positioned to do what it’s supposed to do” — provide the Council with “objective, independent financial analysis.”

“We are entering new territory where the City Council is asserting new, independent authority over the budget process. It can’t do that in a meaningful way without its own access to financial analysis,” Witzburg told the Chicago Sun-Times.

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Chicago Inspector General Deborah Witzburg’s latest report focuses on the Chicago City Council’s Office of Financial Analysis.

Jim Vondruska/Jim Vondruska/For the Sun-Times

But the Council’s financial analysis office, she added, “has never been equipped or positioned to do what it needs to do. It needs better and more independent access to data, and it needs enough staff to do its job. It has a small number of employees and comparatively limited access to data.”

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The inspector general’s farewell audit examined the period from 2015 through 2023. During that time, the financial analysis office budget authorized “either three or four” full-time employees. It now has a staff of five .

Witzburg is recommending a staffing analysis to identify how many people the financial office really needs — and also recommending that the office “get data directly” from other city departments, “ rather than having it go through the mayor’s office.”

The audit further recommends that the office develop “better procedures to meet their reporting requirements” in a timely manner. As it stands now, reports are delivered “sometimes late, sometimes not at all,” the inspector general said.

“We find that those reports have been both not timely and not complete in terms of what they are required to report on and that those reports therefore have provided limited assistance to the City Council in its responsibility to make decisions about the city’s budget,” she said.

The Council Office of Financial Analysis responded to the audit by saying it hopes to add at least three full-time staffers in the short term and has made “some progress” over the last three years in improving their access to data, but not enough.

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The office was created in 2014 to provide Council members with expert advice on fiscal issues.

For nearly two years the reform was stuck in the mud over whether former 46th Ward Ald. Helen Shiller had the independence and policy expertise to lead the office.

Shiller ultimately withdrew her name, but the office was a bust nevertheless. In an attempt to breathe new life into it, sponsors pushed through a series of changes.

Instead of allowing the Budget chair alone to request a financial analysis on a proposal impacting the city budget, any alderperson was allowed to make that request.

The office was further required to produce activity reports quarterly, not just annually.

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Now former-Budget Chair Pat Dowell (3rd) then chose Kenneth Williams Sr., a former analyst for the office, as director and gave him the “autonomy” the ordinance demanded.

Two years ago, a bizarre standoff developed in the office.

Budget Committee Chair Jason Ervin (28th) was empowered to dump Williams after Williams refused to leave to make way for a director of Ervin’s own choosing.

The standoff began when Williams said he was summoned to Ervin’s office and told the newly appointed Budget chair was “going in a different direction, and I’m putting you on administrative leave” with pay.

“He took all my credentials and access away. I would love to come to work. I wasn’t allowed to come to work,” Williams said then.

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Williams collected a paycheck for doing nothing while serving out the final days remainder of a four-year term.

Ervin’s resolution stated the director “may be removed at any time with or without cause by a two-thirds” vote or 34 alderpersons. He chose Janice Oda-Gray, who remains chief administrator.

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Finance

Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

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Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

Little League® International has announced that Reilly Barnes accepted a new role as Purchasing/Finance Assistant, effective April 6, 2026. Barnes transitions from a temporary Purchasing Assistant to this full-time position to assist in the year-round demands of purchasing for the organization, as well as the region and Little League Baseball and Softball World Series tournaments. 

“We are thrilled to welcome back Reilly to our team as a full-time Purchasing/Finance Assistant. Reilly’s prior experience, time management, and attention to detail make him an invaluable asset to the purchasing team,” said Nancy Grove, Little League Materials Management Director. “We look forward to the positive contributions he will have on our organization.” 

In this role, Barnes will be responsible for processing purchase requisitions, coordinating souvenir products, and tracking order fulfillment. He will also assist with evaluating suppliers, reviewing product quality, and negotiating contracts for effective operations.  

After most recently working as a Logistician Analyst at Precision Air in Charleston, South Carolina, Barnes, a Williamsport native, returns after honing his skills in the fast-paced environment. Prior to his time at Precision Air, Barnes served as a Procurement Specialist at The Medical University of South Carolina, where his expertise and knowledge were instrumental in supporting both education and healthcare needs.  

“I am thrilled to return to Little League in this full-time role,” said Barnes. “Coming back to my hometown and having the opportunity to work for an organization that has played such a special part of my upbringing means a lot. I can’t wait begin this new opportunity.” 

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Barnes graduated from the University of Pittsburgh in 2022 with a B.A. in Supply Chain Management, Finance, and Business Analytics.  

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Finance

Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

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Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

As conflict continues to destabilise the Middle East, the Gulf States elite are seeking solace in European alternatives that offer comparable financial benefits with a far lower risk of war on the doorstep. One such destination is the small Swiss town of Zug, which is becoming a “bolt-hole” for Gulf-based wealth, said the Financial Times.

‘Swiss Monaco’

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