I could get £10,000 back due to car finance scandal despite judges landmark ruling – but I'm devastated for others
Roy, 57, from Tayport, bought a BMW 118D in 2016 to help his disabled wife, Elaine, with her mobility issues.
He is one of millions who could still be due back cash as part of the car finance scandal as banks will still be liable to pay out claims for those hit with excessive interest, which dealers earned commission from.
The UK's highest court was considering an appeal against a Court of Appeal ruling made in October last year, which were about three different claims from people who had each bought a car on credit.
In each case, the car dealer made a profit on the sale of the car but also made commission for introducing the business to them - which the three people claimed they did not know about.
These were known as "commission disclosure complaints" and could apply up to 99% of car finance loans.
The Court of Appeal ruled in October that the firms broke the law by not telling borrowers about 'secret' commission payments.
Two lenders, FirstRand Bank and Close Brothers, challenged the ruling in April, calling it a "egregious error".
Today, the Supreme Court overturned the ruling in two of the cases but it does not entirely close down the path for compensation for drivers.
Firstly, it upheld the judgement in the case of Mr Johnson, who was an extreme example of where excessive interest had been charged.
But the UK's highest court ruled that banks are not liable for so-called secret commission payments.
However, they will still be liable for discretionary commission arrangements, which applied to 40% of car finance deals.
The city watchdog - The Financial Conduct Authority - has been considering a financial redress scheme for drivers over PCP and hire purchase agreements from before 2021.
It is where brokers and dealers could increase the amount of interest they charge without telling them. If they did, they got increased commission.
The Supreme Court ruling had put these claims on hold - but now the FCA is set to reveal within six weeks whether it will launch an industry wide compensation scheme.
It is deciding whether this scheme will involve automatic compensation refunds or whether drivers will have to "opt-in". It is also looking at the interest rates for compensation payments.
Payouts could have been as high as £44billion for the scandal in total if the Court of Appeal decision had been upheld, but now they are now expected to be around £20billion.
This will be a big win for the banks and disappointing for affected drivers - but you could still get cash.
Roy had a discretionary commission arrangement for his car, so could still get a payout.
Commenting on the ruling, he said: "These companies have been robbing the poor to benefit the rich. I'm devastated for others."
Roy bought his car for £8,650, but the cost of the credit was an eye-watering £9,356, bringing his total bill to £17,996.
He said the car dealer, John Clark Aberdeen, did not do an affordability check to see if he could afford the monthly repayments, even though he had a bad credit rating.
The monthly repayments were £157 a month, and he was charged an interest rate of 39.1% APR. The term of the loan was five years.
Roy said that he cannot remember having a conversation about any commission he would have to pay for.
'It's been stressful - it was hard to afford the car loan,' he said.
'I was struggling to afford phone bills. If the car needed repair work or an MOT, I would need to borrow money from friends. It was very embarrassing.
'I wish I never took it out because of the interest rate.'
Roy decided to ring legal firm Courmac Legal after watching an advert on television about the mis-selling scandal.
The firm has put in a claim on his behalf, and says that while his lender, Advantage Finance, has not disclosed the level of commission charged, his claim could be worth as much as £10,000.
'I feel disgusted,' Roy said. 'I was completely misled by the dealer and lender when I took out a loan to buy my car.
'The financial impact on my family of the hidden commission was considerable and I've been fighting to get the compensation I'm owed.
'I felt like a fool for paying all that money for a car.'
Roy's local MP, Wendy Chamberlain, said she was 'shocked' to hear about Roy's case.
She said: 'Loans must be transparent practices, not riddled with hidden commissions for those who sell them at the expense of honest people's hard-earned money.'
Advantage Finance and John Clark Aberdeen were contacted for comment.
Who can claim?
That has not been confirmed but anyone who had a car, van or motorbike on PCP or hire purchases before January 28 2021 could be due back £1,000s.
More than 23million people believe they could be in line for compensation, polling by consumer law firm Slater and Gordon suggests.
Consumer groups have estimated that motorists took out more than 30million car loans over those years.
The FCA will decide who and how this will work within six weeks of today's judgement.
It has said it may even do it without the need for people to reclaim, with firms ordered to make automatic refunds.
It is likely that you won't be able to complain about agreements taken out before April 6 2007, as this is when the Financial Ombudsman took over motor finance complaints, but the exact rules are still being worked out.
DCAs were banned after January 2021, so anyone who took out an agreement after this time wouldn't be able to claim.
How to claim
While we wait for the FCA to reveal it's plans you can still lodge a claim.
If you think you should be compensated, consumer finance website MoneySavingExpert.com has a free email template to help you complain to your finance provider.
You can also complain directly to your provider without using the template.
Anyone who took out car finance and could be eligible should file a claim, even if their previous one was denied.
In your complaint, ask whether you were overcharged due to your broker receiving a commission and ask the company to rectify this if it happened.
If you are not happy with the company's response then you can escalate your complaint to the Financial Ombudsman Service for free.
You have until July 29, 2026, or up to 15 months from the date of the company's final response letter to do so, whichever is longer.
'My jaw hit the floor when I discovered the huge £44billion car finance scandal'
PAUL Carlier's jaw hit the floor the moment he discovered that dealerships and brokers were arranging finance deals with high interest rates for customers so they could bag a higher commission.
It was back in 2015, when he and his wife were taking out a deal for a new Mercedes, that the car dealer revealed the scandal.
'I was gobsmacked - I had to pick my jaw off the table,' he said.
Little did he know that this would mark the beginning of a huge £44 billion mis-selling expose.
Paul, 56, who investigates financial crime for a living, is the whistleblower who first exposed the car mis-selling finance issue in 2016.
He has been fighting to expose the alleged dodgy deals ever since and get redress for affected drivers since.
It all started in 2011, when Paul's mother-in-law Alison took out a car finance agreement with a high interest rate of 14.9%.
Paul, knew something was wrong. Alison, now 84, had a perfect credit score so shouldn't have been charged such a high rate.
Alison bought a Ford S Max for £25,574 in September 2011 from car dealer SMC Motors.
Her finance agreement was with Black Horse, and the total cost of the credit was £9,424, making her total bill around £35,000.
The interest rate on her deal was 14.9% APR, which Paul believed was way too high based on her pristine credit history.
'I thought the APR was excessive and inappropriate,' he said.
He made a complaint to Black Horse in May 2012, but after the lender investigated, he was told that she had not been mis-sold.
'I wasn't happy, it didn't add up,' he said.
In December 2015, his wife, Louise, also bought a car on finance.
The Mercedes E Class was £27,950 and the cost of credit was £8,376 - bringing the total bill to £36,326.
The interest rate on her deal was 8.9% - which Paul said was 'much better than his mother-in-law's' to the car dealer at 123 Prestige.
Then, the car dealer started to unveil how the finance deals were arranged.
'The higher the APR charged, the bigger the commission the dealer gets paid,' he said, which means dealerships and brokers were incentivised to charge higher interest rates.
Paul made complaints to Black Horse, the FCA and the Financial Ombudsman about both Louise's and Alison's deals, which were both discretionary commission arrangements.
They could still get compensation.
Commenting on the Supreme Court's decision, Paul said: "It's not over - this won't end here - with the evidence we've got, we will bring new claims and class actions on behalf of the victims who have today been denied justice."
Black Horse and SMC Motors was approached for comment.
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