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The FCA have recently been investigating Motor Finance Agreements and have found a number of issues resulting in possible compensation claims for miss-sold car finance. The following 8 being the most common:
This means that much like PPI over the past few years, there is potential for you to claim money back based on misleading advice and hidden charges.
When you purchase a car on Finance, the dealer has a legal obligation to present you with various finance options to ensure the correct product is picked for your unique circumstances. If this is not the case, then the chances are you paid more than you needed to, and you have the right to make a claim.
A Mis-sold claim can also be triggered when unexpected charges are at the end of the finance agreement, or you run into financial problems due to an unmanageable finance plan. Start your free no-obligation check. You could be owed £1000’s.
Did you know that part of the money you paid was used to directly pay commission to the dealership? We can help you claim compensation when the dealership did not tell you that they were receiving a commission for arranging the Finance with the finance provider. This is a breach of regulations and is known as a ‘Section 140’ claim.
Did you know that the dealership and the finance company had a legal obligation to disclose to you that commissions were being paid. We do not think this is fair, and if you agree, then start your free no-obligation check. You could be owed £1000’s.
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Click the start my free check button and answer a few simple questions.
Our system will automatically review your answers and let you know if you are eligible to claim within 30 seconds.
If your happy to proceed, we will start the no-win-no-fee claim and you could be awarded £1000’s within just a few weeks/months.
Recently a financial conduct authority investigated widespread evidence of unethical mis-selling on every type of vehicle finance. The evidence uncovered over 560,000 consumers that were victims of excessive interest levels. The FCA discovered that over 50% of these people are paying more on Finance than they should’ve been.
During the investigation, miss-selling was found on all motor vehicle types, including new and used cars, vans, and commercial vehicles. However, the biggest culprit was personal contract hire (PCP). This kind of finance agreement involves low monthly payments followed by a final balloon payment.
During the financial conduct authority’s investigations, an alarming number of cases were found where the broker was given complete carte blanche to adjust interest rates. This meant a higher level of commission was available for the dealership by the finance provider.
Recently one article was released where the dealer openly admitted, “frankly, we were getting away with murder. We weren’t treating customers fairly and were, in effect, charging them to earn us money.”
the FCA found that some dealerships and finance companies were charging well over the actual fees by up to £1000 a deal. It is clear that consumers around the UK are essentially paying for their dealer’s commissions. It is a legal requirement that all commission payments be made clear to the consumer at the beginning of negotiations.
Get started today and save yourself time and hassle
If you answer ‘No’ to any of the below, you may be eligible to make a claim:
We assist clients in claiming compensation for the non-disclosure of commissions received by the Dealership by the finance provider. Both the Dealership and Finance Provider were obligated to be transparent and inform you of the commissions being paid. This is known as a ‘Section 140’ claim.
We assist clients claim compensation for the mis-sale of finance. This is usually if you were not provided different finance options to find the right fit for you. This can also be if you encountered unexpected charges at the end of the finance, or if you fell in payment difficulties as the finance was unaffordable.
We offer a free assessment service. If we find merits to pursue a claim, we will inform you. From here you have a choice to proceed with one of our panel Solicitors where we will inform you of the Solicitor and their fee structure. All our legal partners offer a risk-free, no-win no-fee service.
If you decide to move forward with a claim through our legal partner, we may receive a commission from them. You will never need to pay us anything – that’s how we keep our service free for our happy clients.
Claims for the non-disclosure of commissions must be made through a law firm as it is a litigated process. You can make a claim for mis-sold finance yourself directly to your lender, and submit to the Financial Ombudsman Service if you are not happy with the response.
No, the claim will be brought against the finance provider. The Dealerships acts as the broker and as an ‘agent’ of the finance provider. It is the responsibility of the finance provider to ensure their ‘agents’ are adhering to the relevant FCA regulations.
Claim amounts vary across consumers. The exact amount of your compensation will depend on factors such as:
You can make a claim for any/all finance agreements you had which were active after April 2008.
If you are successful in claiming, you do not have to give the vehicle back. The only instance where you may not receive the entire compensation you are owed is if you are in arrears with your finance payments. Some of the compensation may be used to bring your account up to date.
This is not a problem as we can request I from both the Dealership and/or the finance provider.
If you are able to locate any paperwork from your past and present vehicles then this will certainly help shorten our assessment process.
We see this as an instant cause for a mis-sale. It is a CONC requirement for a lender to disclose to the borrower that the credit broker will receive commission for arranging the agreement.
DiC commission models were recently condemned by the FCA and will become illegal in 2021. The majority of motor finance agreements in recent years have been drawn up under the influence of DiC commissions.
All terms of a credit agreement must be properly explained to the borrower according to CONC. The FCA found this was rarely the case. Terms such as interest-only loan and balloon payment are frequently brushed over. Many people entering into PCPs are unaware that they won’t own the vehicle until the balloon payment has been made.
Interest can be applied to a balance in many different ways. A lender must describe how they apply interest in the contract. A common example of malfeasance in this regard is when the contract states a seemingly low interest value, which is then applied at a flat rate (i.e. to the whole balance over the whole period, regardless of how much is paid off). Interest applied at a flat rate gets very high returns for what appears to be a low value of interest. By not explaining this aspect of the contract, lenders are misleading their customers and breaching consumer credit law.
It is a CONC requirement that lenders evaluate their customers’ ability to repay their loan. This is called a creditworthiness assessment. Lenders in the motor finance market sometimes fail to carry out such an assessment or, if they do, fail to act according to it. If the lender can not provide a record of the creditworthiness assessment they undertook for their customer, this is grounds for a mis-sale.
A credible source has told us that up to 25% of brokers selling motor finance are not regulated by the FCA. This is a serious breach of UK credit law and, if found to be true, will void any contracts arranged by said brokers. We have yet to see evidence for this but have included it in the report, in anticipation, as it will be the quickest way to claim a mis-sale.
DiC models aside, we believe interest rates are not being set using the appropriate criteria. A common pattern on the websites of car manufacturers is to offer the flashier, more expensive cars on finance plans with higher interest rates than their less desirable counerparts. The notion of this is absurd because the interest rate of a loan should have nothing to do with the product that the loan is being used to purchase; it should be determined byu the unique financial situation of the borrower.
Customers are frequently presented with charges for various reasons at the end of their contracts. Excessive damages charges for un-noticably low, early repayment charges that penalise a customer of buying the car before the contract expires – all of these arise frequently.
