The sudden resignation of Abby Thomas, FOS CEO (Financial Ombudsman Service), has raised serious concerns about the regulator’s ability to handle the growing car finance mis-selling scandal.
Her departure comes just days before she was due to face questioning by MPs, with critics now questioning whether the FOS is structurally capable of processing the wave of consumer complaints expected over car finance mis-selling.
At Sentinel Legal, our investigations over the past four years have uncovered widespread failures in hidden commissions, dealer payments, and regulatory oversight. With 31.7 million finance agreements potentially mis-sold and Moody’s estimating a £30 billion financial impact, consumer redress is at stake.
The FOS’s Role in Car Finance Mis-Selling: System Failure?
The Financial Ombudsman Service (FOS) was designed to handle individual consumer disputes, but the scale of the car finance crisis far exceeds its normal caseload.
🔎 Key concerns around the FOS handling of car finance claims:
Massive backlog expected
The FOS was never structured to handle a mis-selling scandal of this magnitude.
Government revenue model
Critics suggest that deliberate inefficiencies may extend claim timelines, pushing more consumers into FOS’s £250 complaint fee system.
Regulatory confusion
Reports suggest that FCA redress guidance remains vague, allowing lenders to delay or reject claims, forcing them into the overloaded FOS system.
With hundreds of thousands of claims expected, can the FOS handle the financial fallout—or is this another system built to fail?
🔗 Learn more about FCA regulation failures and car finance mis-selling here.
The Financial Cost: Santander’s 38% Profit Drop & Growing Industry Liabilities.
The car finance mis-selling scandal is already hitting lenders hard, with Santander UK reporting a 38% drop in annual pre-tax profits and setting aside £295 million for potential compensation payouts.
However, the true financial damage is likely far greater. According to Moody’s, the total industry-wide liability could reach £30 billion.
Why Santander is Feeling the Pressure
£14.96 million in advanced commissions – Our investigations found Santander paid £14.96M upfront to a dealer network, tied to a £75M loan commitment—a clear conflict of interest.
£16,049 in hidden commissions – In one £81,509.05 Land Rover finance agreement, we uncovered that 61% of the total cost of credit was hidden commission payments.
🔗 Read more about Santander’s hidden commissions and their impact on car finance claims here.
Sam Ward, Sentinel Legal Director, on the FOS CEO’s Resignation
"The timing of Abby Thomas’s resignation is highly concerning. The FOS was about to face tough questions on its ability to handle the car finance crisis, and suddenly, its leader steps down. Consumers should be asking, what was she not willing to answer?"
"With Santander already setting aside £295 million and Moody’s predicting £30 billion in total liabilities, the financial impact of car finance mis-selling is only beginning to unfold. If the FOS is unprepared, and the FCA allows vague redress policies, consumers risk being left in limbo while lenders stall payouts."
"At Sentinel Legal, we are prepared to challenge every case, because we already know what the lenders and regulators don’t want you to see."
What This Means for Consumers
If you’ve taken out car finance since 2007, you could be affected. Santander, and many other lenders, have built finance agreements on hidden commissions, inflated interest rates, and undisclosed fees, leaving consumers to pay thousands more than they should have.
🔗 Find out how hidden commissions affect your car finance here.
Frequently Asked Questions (FAQ) About the FOS CEO Resignation & Car Finance Claims
1. Why did the Financial Ombudsman Service (FOS) CEO resign?
Abby Thomas resigned just days before she was due to face questioning by MPs regarding the FOS’s ability to handle car finance mis-selling claims. This raises concerns about whether the FOS is structurally prepared for the scale of the compensation crisis.
2. What does this mean for car finance mis-selling claims?
The resignation adds uncertainty to how the FOS will process car finance claims. With 31.7 million agreements potentially mis-sold, delays and inefficiencies could affect consumers seeking redress.
3. How much money has Santander set aside for car finance claims?
Santander has set aside £295 million for potential compensation payouts related to car finance mis-selling. However, Moody’s estimates the industry-wide liability could reach £30 billion, indicating Santander’s exposure could be much higher.
4. What are hidden commissions in car finance agreements?
Hidden commissions are payments made by lenders, like Santander, to brokers or dealers for securing finance agreements. These commissions are often undisclosed, leading to higher costs for consumers.
5. How do I know if my car finance agreement included hidden commissions?
If you financed a car through a dealer since 2007, there’s a high chance your agreement contained hidden commissions. Sentinel Legal can investigate your finance agreements and uncover any mis-sold terms.
6. How much compensation could I receive?
Compensation varies, but some clients have recovered thousands of pounds. In one case, Sentinel Legal uncovered £16,049 in hidden commissions on an £81,509 finance agreement, where 61% of the total cost of credit was hidden commission payments.
7. What’s my next step if I think I have a claim?
Sign your Conditional Fee Agreement (CFA) to start your claim. Sentinel Legal will investigate your agreements, identify any hidden commissions, and fight for your compensation.
What Should You Do If You’ve Had Car Finance?
Sign Your Conditional Fee Agreement (CFA) - it only takes a minute.
We Investigate Your Agreements - we’ll uncover any hidden commissions or mis-sold terms.
Get Your Money Back - we handle everything on a no-win, no-fee basis.
The Bottom Line
The resignation of Abby Thomas from the Financial Ombudsman Service isn’t just about leadership, it’s about whether the FOS is capable of handling the UK’s biggest financial scandal since PPI.
With £30 billion in estimated liabilities, growing consumer awareness, and lenders already preparing for legal battles, the fight for car finance compensation is only just beginning.
🔗 Follow Sentinel Legal’s latest updates on car finance mis-selling here.
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