MoneyWay Says It Never Finances GAP. Its Own Evidence Says Otherwise.

A false denial, inadequate lending controls and yet another attempt to hide behind limitation

There are complaint responses that avoid the issue, and then there are complaint responses that expose the entire problem.

MoneyWay has told us:

“MoneyWay do not provide or finance GAP insurance products.”

That is a categorical statement. There is no qualification, no uncertainty and no suggestion that MoneyWay’s position depends upon the individual transaction.

There is just one problem.

The dealership invoice contains a £399 charge for GAP insurance, and that invoice formed part of the vehicle transaction funded by MoneyWay.

MoneyWay then admits in the very same response that the £399 may have been for GAP insurance.

Its position therefore appears to be this:

MoneyWay never finances GAP insurance. MoneyWay financed an invoice containing GAP insurance. MoneyWay did not realise it had done so.

That is not a defence, but an admission of a potentially serious failure.

Either the statement is false or the controls were woefully inadequate

The issue could hardly be simpler.

If MoneyWay advanced the funds used to pay the dealership invoice, and that invoice included £399 for GAP insurance, MoneyWay financed the GAP product.

It does not matter that MoneyWay was not the insurer. It does not matter that the dealership physically sold the policy. It does not matter that the word “GAP” may not have appeared on the face of the credit agreement.

MoneyWay advanced the money. The customer borrowed the money. MoneyWay charged interest on the money.

MoneyWay therefore profited from financing a product that it now claims it never finances.

Its statement is not merely misleading, it is demonstrably false by its own admission and disclosure.

The alternative is scarcely better. If MoneyWay genuinely did not know that the dealership invoice included an insurance product, what checks did it carry out before releasing the funds?

Did anyone review the invoice?

Did anyone reconcile the items being purchased against the amount advanced?

Did MoneyWay know that the customer was borrowing an additional £399?

Did it know where that money was going?

Did it understand that interest would be charged on the cost of an ancillary insurance product?

MoneyWay’s response suggests that it may have financed the entire transaction without understanding what was included within it.

For a regulated lender, that is an alarming position.

“We did not know” is not a regulatory defence

MoneyWay says it has no information about the GAP product, including the identity of the supplier.

Again, that does not help MoneyWay in any way. In fact, it makes the position worse.

A lender must know what it is financing. It must know why the amount advanced differs from the basic vehicle price. It must have adequate systems to identify additional products incorporated into a credit-funded transaction.

MoneyWay admits to not knowing who supplied the GAP product, who insured it, where the £399 went or how much of that money was swallowed by chain commission and remuneration.

Yet it was content to advance the money and charge the customer interest on it.

This is not some obscure administrative detail discovered years later. It concerns the very purpose for which part of the credit was advanced.

Either MoneyWay’s original controls were inadequate, its present complaint investigation is inadequate, or both.

The GAP sector’s grotesque secret commissions explain the reluctance to investigate

MoneyWay’s response cannot be viewed in isolation from what is being uncovered across the GAP insurance market.

We have already exposed a dealership retaining 73.6% of a customer’s payment as commission. In another case, only 23.2% of the customer’s money went towards the GAP product, while 76.8% was retained by Advantage Finance.

In the most grotesque example uncovered so far, a product with a gross underwriting premium of just £57 was sold to the customer for 429, producing an extraordinary 86.7% difference between the underwriting cost and the retail price.

These are not modest sales commissions. They are not ordinary commercial margins.

They are examples of consumers being charged hundreds of pounds for supposed insurance “premiums” while only a fraction of their money paid for the actual insurance risk.

The FCA’s own inadequate intervention in the GAP market followed serious concerns about fair value, including commission levels reaching as much as 70% of the customer’s premium.

Out investigation has clearly delved deeper and uncovered a vast array of suitability issues, undisclosed chain commission far beyond that discovered by the FCA, and even the existence of discretionary commission models similar to those within the motor finance commission scandal.

The scale of the problem is no longer open to serious debate.

What remains hidden by lenders and dealerships is precisely how the customer’s money was divided between parties throughout the chain.

That is why MoneyWay’s apparent failure to identify the product or obtain the commission figures is so serious.

It cannot fairly reject the complaint while refusing, or failing, to establish the most important facts.

Then comes the same tired limitation trick

MoneyWay states:

“Given the time that has elapsed, the opportunity we had to raise this with the selling dealership has long since passed.”

This is not a proper limitation argument.

It is not even a recognisable legal analysis.

MoneyWay does not identify the limitation period it relies upon. It does not explain when that period supposedly began, nor does it say why the customer should have known about undisclosed chain commission years earlier.

It does not identify what opportunity has allegedly “passed”, or under which contractual or statutory provision.

Instead, MoneyWay appears to say that because it left matters too late to investigate the dealership, the customer must lose their rights.

That is plainly unacceptable, and an argument that we have defeated repeatedly.

Any failure by MoneyWay to retain records, identify the product or make timely enquiries is MoneyWay’s problem. It cannot be transferred to the customer.

More importantly, the relevant limitation clocks do not simply begin on the date of sale.

For Financial Ombudsman Service purposes, the three-year period runs from when the customer became aware, or ought reasonably to have become aware, that they had cause to complain.

For civil claims, section 32 of the Limitation Act 1980 can postpone the commencement of limitation where relevant facts have been deliberately concealed.

That principle was tested all the way to the Supreme Court in Canada Square Operations Ltd v Potter.

The case involved an insurance product financed through credit and a commission that had not been disclosed to the customer.

Canada Square attempted to argue that the claim had been brought too late.

It failed, just as all similar arguments fail, just as MoneyWay’s argument will fail.

The lesson could hardly be clearer.

A firm cannot withhold the salient facts and then complain that the customer did not act sooner.

MoneyWay’s limitation argument defeats itself

MoneyWay says it does not know who supplied the GAP product.

It has not disclosed the underwriting cost.

It has not identified the insurer or administrator.

It has not revealed how the £399 was divided.

It has not disclosed the dealership’s commission.

It has not established whether other intermediaries retained further remuneration.

It has not identified whether MoneyWay received any direct or indirect financial benefit beyond the interest charged on the borrowing.

MoneyWay therefore admits that it does not know the very facts at the centre of the complaint.

Yet it apparently expects the customer to have known enough about those hidden arrangements to complain years ago.

That position is absurd.

The limitation argument does not protect MoneyWay. It exposes the weakness of its investigation.

Until the chain commission and remuneration are identified and disclosed, MoneyWay cannot credibly establish when the customer knew, or ought reasonably to have known, that there was cause for complaint.

The clock cannot sensibly be said to have expired when MoneyWay has not even established when it began.

This response should concern the regulator

MoneyWay’s response leaves only two realistic possibilities.

Either MoneyWay made a categorical statement about never financing GAP insurance that is contradicted by the transaction evidence, or it advanced credit without adequate controls to identify what it was financing.

Neither outcome is acceptable.

MoneyWay then compounded the problem by admitting that it lacks basic information about the product and attempting to use the passage of time to avoid obtaining it.

This is not fair complaint handling.

The lender financed the invoice. It benefited from the interest. It must now identify the product, reconstruct the transaction and obtain the complete chain of commission and remuneration.

MoneyWay cannot fund GAP insurance, earn money from the borrowing, deny that it ever finances GAP, admit that it does not know what happened to the customer’s money and then hide behind limitation.

Its response does not close the complaint.

It provides further evidence of why the complaint must be pursued, and the case has been escalated and copied to James Dipple-Johnstone (Chief Ombudsman).