Paper avalanche: How one bank's unusual tactic affects thousands of car owners
A major UK bank sends truckloads of paper mail to lawyers handling car-finance claims‚ while other banks use email. This unusual approach costs around quarter-million pounds weekly in processing
Black Horse‚ Lloyds Banks finance division‚ sends truck-loads of paper mail to legal firms - a move thats different from other lenders electronic approach. The banks unusual tactic affects car-finance compensation claims processing
In mid-Nov 2024‚ Darren Smith from Courmacs Legal got over-whelmed with mail: “We get post delivered by truck now; its not your standard delivery van anymore“. The firm got hit with 200k letters last week (costing about 250k pounds in total processing fees)
The car-finance industry faces a big problem - banks might need to pay back 16bn pounds for hidden dealer fees. While most banks send emails to handle claims Black Horse keeps sending paper letters; this doesnt match with Lloyds promise to have zero waste by 2030
We are required to acknowledge every complaint that we receive
The law firm had to buy special machines to handle all this mail - they represent 1‚3m people who want their money back. The Financial Control Authority gave banks more time to process claims but some lawyers say banks dont share all info about dealer fees
- Banks set aside lots of money for claims
- Lloyds put aside 450m pounds
- Law firms can get up to 49% of compensation
- Claims need special financial records from banks
The banks rep says they work on moving to e-mail systems‚ but for now paper mail is their fastest way to respond. Elizabeth Comley from Slater and Gordon points out that some banks make it hard to get needed records which creates a big backlog
