The Financial Ombudsman Service (FOS) functions as an essential intermediary to settle disputes between consumers and financial service providers. UK consumers increasingly report hidden car finance commissions and unfair contracts which prompts them to request the ombudsman for investigation and compensation support.

The process of filing complaints becomes more complex for consumers when lenders refuse to cooperate with the ombudsman. Consumers trapped in these situations struggle to progress since they cannot identify subsequent actions or assess whether justice will be served.

This article explores what happens if your car finance provider does not respond to the ombudsman, the role of the FCA car finance regulations, and what actions you can take to ensure your complaint is heard and resolved.

When and Why Lenders Refuse to Cooperate

Car finance companies are, in most cases, required to respond promptly to consumer complaints and any enquiries from the FOS. Yet, some lenders may delay their response—or worse, choose not to respond at all.

Common Reasons for Non-Cooperation:

• Internal administrative delays or a backlog of complaints. Car finance companies face a surge in complaints after the FCA reviewed discretionary commission arrangements. Severe delays in responding to both customers and the ombudsman result from inadequate internal systems and staff shortages.
• Disputed regulatory obligations—some lenders argue that certain complaints fall outside the jurisdiction of the FOS. Lenders assert that their agreements predate particular regulations and they claim the FOS cannot review those complaints. Some parties employ this strategy as a means to postpone legal proceedings or avoid scrutiny despite their arguments being weak legally.
• Pending litigation or broader investigations—especially relevant in the context of the recent car finance scandal. Some lenders cite ongoing legal action or regulatory reviews as reasons for pausing complaint responses. While this may occasionally be valid, many firms use it to delay responding to consumers without justification.
• Avoidance of liability, particularly in cases where mis-selling is likely. Lenders opt out of involvement when they foresee considerable financial losses or negative legal precedents from supporting the complaint. Should the lender decide not to respond to the complaint it risks a Financial Ombudsman Service (FOS) ruling that benefits the consumer because evidence already exists.

Impact on the Complaint Process:

Without lender engagement in FOS operations, the claims processing experiences delays. While an ombudsman can formulate decisions based on available evidence, they find it difficult to deliver equitable and prompt resolutions without proper cooperation. The lack of lender participation creates uncertainty and frustration among consumers while causing financial stress especially in cases of unaffordable lending or concealed commissions.

FCA Expectations for Regulated Firms

The Financial Conduct Authority (FCA) sets out clear rules for how regulated firms must behave, including their obligations to cooperate with both consumers and the FOS during the complaints process.

Regulatory Obligations:

• The final response needs to be delivered within eight weeks from the time the complaint is received. The 8-week deadline stands suspended for motor finance complaints that deal with discretionary commission arrangements (DCAs). The pause remains active until 4 December 2025 to provide time for the Supreme Court to make decisions on appeals regarding undisclosed commissions legality which will influence the resolution process for such complaints.
• Firms should provide complete cooperation and all required data whenever the FOS manages escalated cases to help reach a solution.

Consequences of Ignoring FCA/FOS Directives:

Failure to comply with these obligations is a serious breach of FCA rules. The consequences may include:

• Regulatory sanctions, including fines.
• Reputational damage as non-cooperation can become a matter of public record.
• Legal implications, particularly where deliberate non-compliance is suspected.

The regulator issued a directive for firms to handle complaints seriously after commencing the FCA car finance claims review in early 2024. The FCA mis-sold car finance investigation has caused an increase in consumer complaints which has put lenders under scrutiny for their dispute resolution processes.

What Consumers Can Do If Their Lender Doesn’t Respond

If you find yourself in a situation where your car finance provider fails to engage with the FOS, you are not powerless. Several escalation options are available.

1. Submit a Complaint to the FCA

The FCA cannot adjudicate individual disputes but it monitors firm behaviour while possessing regulatory enforcement powers. If a lender fails to respond to the ombudsman several times, then it becomes possible to report them directly to the FCA which may trigger a supervisory review.

When you register a complaint with the FCA, you won't get immediate results but you help enforce accountability while increasing pressure on the lender.

2. Use a Claims Management Company (CMC)

Consumers often use a claims management company to handle complicated or halted cases. Claims management firms maintain established regulatory connections along with knowledge of legal systems and complaint resolution structures.

A reputable CMC can:

• Re-engage the lender with structured legal correspondence.
• Escalate your case efficiently.
• Collect and present evidence on your behalf.
• Ensure your rights are fully protected.

The service proves most beneficial when paperwork understanding is lacking or when the case promises significant financial compensation.

Case Study Examples

Case 1: High Court Upholds Ombudsman Ruling Against Barclays

A client received £1,327 from the Financial Ombudsman Service for their mis-sold car finance agreement with hidden commissions, which Barclays Bank contested. When the High Court denied Barclays' appeal, it strengthened the power of the FOS while establishing a legal standard for future claims. The ruling enables several compensation claims worth billions of pounds to emerge from the car finance scandal.

Case 2: Surge in Complaints Amidst Car Finance Mis-Selling Scandal

The Financial Ombudsman Service processed over 140,000 complaints between July and December 2024 including many cases of mis-sold car financing agreements. Many car finance deals hide commissions, resulting in consumers facing excessive charges which causes the surge. The Financial Conduct Authority (FCA) conducts an investigation of these practices that may lead to large-scale compensation payments.

The car finance scandal has made many historical lending practices questionable which demonstrates why persistence and professional representation are crucial.

Reclaim247’s Role in Handling Uncooperative Lenders

Reclaim247 provides a professional solution for consumers facing complex disputes with lenders who do not respond. With their wide-ranging knowledge of mis-sold car finance and regulatory non-compliance, Reclaim247 ensures your rights are protected and your complaint receives the attention it requires.

How Reclaim247 Helps:

• Free initial consultation to evaluate your case.
• Full complaint management, including submitting your case to the FOS.
• Follow-up action if the lender does not respond or attempts to delay.
• Liaison with regulators, such as the FCA, when systemic issues are identified.

Throughout the entire process, Reclaim247 keeps clients updated while ensuring compliance with all regulatory deadlines and essential documentation. Their team will guide you through the process to regain control and advance your case whether you've just started your complaint or encountered delays.

Conclusion

Facing a lender who refuses to cooperate becomes particularly irritating because your financial security is threatened. Consumers benefit from comprehensive regulatory protection along with support structures and escalation procedures. The car finance ombudsman can still issue a decision even without full cooperation from the lender, and further action through the FCA car finance review process may ultimately lead to broader resolution.

Don’t let your situation escalate if there's evidence of mis-sold car finance by your lender or delays in handling your complaint—especially in cases linked to FCA mis-sold car finance claims. Professional assistance from established claims firms such as Reclaim247 can transform a stagnant complaint into a successful outcome.

File your claim today because you stand to gain thousands without risking anything.