Car finance scandal: could you still get compensation?
The upholding of the judgment could have paved the way for anyone who took out a car finance loan before 2021 to be in line for some form of compensation.
Now it's been overturned, pending any further appeals or escalations, it could mean only those who are eligible to claim against the potential misuse of discretionary commission arrangements could receive compensation – pending further information from the FCA.
This could still implicate a lot of people, but the scale is not expected to be as huge if it also included commission disclosure complaints.
The Supreme Court, however, did uphold one complaint against the lenders, suggesting there could be scope for some individuals to successfully claim.
It upheld a claim from a claimant over an 'unfair' relationship between a customer and a finance company. The size of commission was 55pc of the total charge for credit.
As it was so high, the 'relationship' between the customer and finance company was deemed to be unfair.
How much could I be owed?
This is still unclear.
In regards to the discretionary commission agreement arm of the scandal, those who signed up to multiple car finance agreements between 2007 and 2021 could be eligible for several payouts. The average mis-sold car finance payout, according to LawPlus Solicitors, is £1,500.
The FCA has suggested that for a typical £10,000 four-year car finance deal, a customer could have overpaid £1,100 in interest.
Exact amounts would depend on individual circumstances. A driver would likely receive the difference between the amount they paid at an inflated interest rate and the rate they should have been charged. Interest of 8pc on the overpayment would also likely be added, so the payout could be quite substantial.
Should I use a claims management company?
Thousands of drivers have been lodging compensation claims via claims management companies, which charge a commission fee upon the outcome. Scores of law firms are also offering 'no win, no fee' deals to manage claims.
You do not need to use one of these companies to make a claim.
Consumer rights expert Martyn James said there was 'no reason whatsoever for claims companies to exist'.
He said: 'They are like vultures. This industry made millions if not billions from PPI claims, and now they are doing the same with car finance. They are out in force.'
Regulated claims firms can take up to 30pc of the reward, up to a maximum amount of £10,000, excluding VAT, whereas those who go solo will receive 100pc of their payout.
You may not even have to make a claim yourself, as the FCA is considering setting up a free redress scheme, which will force lenders to automatically compensate consumers.
What should I do next?
For discretionary commission arrangements, the best thing to do is wait and see what the FCA reveals in six weeks' time. It could be influenced by the Supreme Court's separate ruling, so it is best to wait for the next development.
Do not use a claims management company, as the FCA could force banks to automatically compensate impacted consumers.
In case an automatic redress scheme isn't set up, you could log a claim if you haven't done so already. In order to do so, you'll need to contact your original lender and ask them about the commission agreements secured on your deal.
The FCA has put a pause on the deadline for providers to get back to you while it carries out its investigation. As it stands, lenders don't have to respond to your complaint about car finance until December 4 this year.
If you're unhappy with the eventual response from the lender, you can take your case for free to the Financial Ombudsman Service.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times
16 minutes ago
- Times
Eugene Shvidler case highlights threat to fundamental liberties
E ugene Shvidler left the Soviet Union in 1989 and obtained refugee status in the US before being granted a UK visa under the highly skilled migrant programme. A British citizen since 2010, Shvidler and his family chose to build their lives in England. He has not set foot in Russia since 2007, holds no ties to its regime, and has never been a citizen of the Russian Federation. Indeed, in 2022, he publicly condemned the 'senseless violence' in Ukraine. Nevertheless, that year the British government took the draconian step of freezing Shvidler's assets on the basis that he was 'associated with' Roman Abramovich, the former owner of Chelsea FC; and that he was a non-executive director of Evraz, a mining company carrying on business in a sector of strategic significance to Russia. Critically, because Shvidler is a British citizen, the asset-freeze makes it a criminal offence for him to deal with his assets anywhere in the world — subject to certain limited exceptions. Roman Abramovich, left, with Eugene Shvidler, centre ALAMY Ironically, had Shvidler not become a British citizen, the asset-freeze would be limited to his assets in the UK — he would have been better off. Instead, he cannot even buy food without obtaining a licence to do so. This is in circumstances where he has done nothing unlawful. It is unquestionable that the asset-freeze interferes with Shvidler's ability to have peaceful enjoyment of his possessions, a right guaranteed by the European Convention on Human Rights. The question is whether such interference is justified in the public interest. Having failed to persuade the government and the lower courts that the answer to that question was a resounding 'no', Shvidler appealed to the Supreme Court to uphold his rights. Sadly, they did not do so — the majority decision of four to one deferred to the government on the basis that the executive branch has a 'wide margin of appreciation' when imposing sanctions for the pursuit of foreign policy objectives. Lord Leggatt did not defer. In a dissenting judgment that will roar through the ages, he championed the constitutional role that our courts should play in keeping checks and balances on the executive powers exercised by the government. Without that separation of powers, our fundamental liberties are under threat. Citing Magna Carta and Orwell, Lord Leggatt stood up for those liberties and declared unlawful the asset-freeze 'without any geographical or temporal limit' which has deprived Shvidler of the basic freedom to use his possessions as he wishes, a freedom to which he should be entitled as a citizen of this country. In 1989, Shvidler left a country in which — in his words — 'individuals could be stripped of their rights with little or no protections'. He has since left the UK for the same reason. James Clark is a partner at the firm Quillon Law; Jordan Hill, an associate at the firm, also contributed to this article
Times
16 minutes ago
- Times
Symbolic gestures won't prevent illegal working
T he Home Office's latest move to crack down on illegal working in the gig economy feels more like political theatre than a serious solution. Announcing a plan to share data with food delivery businesses such as Deliveroo, Just Eat, and Uber Eats, specifically around asylum hotel locations, sounds bold on paper. But in reality, it is unlikely to achieve much. The government wants these companies to flag and cancel accounts repeatedly active in 'high-risk' areas. But this relies on the flawed assumption that such monitoring will deter or even detect illegal workers. It won't. The simple fact is that account sharing is incredibly easy to get around. More information will be shared with food delivery companies such as Just Eat, Uber Eats and Deliveroo ALAMY And the reality is that these companies do not have a genuine incentive to stop it. Unlike traditional employers, they are not subject to a penalty of up to £60,000 per illegal worker. So why would they invest in better checks or policing their own systems? The simple fact is that gig economy companies do not know who is using their apps, and who is engaging with their customers under their brand name, making illegal work easy, effortless and undetectable. If ministers were serious about tackling this issue, they would demand more — facial recognition or real-time identity verification every time a job is accepted could make a real difference. Illegal workers simply would not be able to operate. But until that's mandated, and until companies face real consequences, nothing will change. Worryingly, the issue does not end with gig economy firms. There is a troubling lack of understanding among traditional employers about their own compliance risks. Since 2022, businesses have been allowed to use digital verification services for right to work checks on British and Irish nationals. But many are using the same checks for foreign workers without realising that doing so leaves them legally exposed. Employers are surprised to learn that they are not establishing the all-important statutory excuse for their foreign workers. Large organisations — including NHS trusts, local authorities, universities and household organisations — are unknowingly putting themselves at risk. They believe using digital verification is enough — but it does not give them the legal protection they think it does. When foreign workers lose their right to work, or even exceed their permitted hours, employers are shocked to be slapped with penalties from the Home Office. Both the gig economy and traditional employment are riddled with loopholes. And while the government focuses on symbolic gestures such as data sharing, illegal work will continue, unchecked and undetected. If this crackdown is to mean anything, there needs to be more enforcement, starting with the government holding the platforms and third-party providers accountable. Emma Brooksbank is a partner at the law firm Freeths
The Sun
19 minutes ago
- The Sun
Tragic tech tycoon Mike Lynch's business partner left huge sum in will before dying in car accident
THE business partner of tragic tech tycoon Mike Lynch left more than £350,000 in his will. Stephen Chamberlain was killed in a freak car accident just days before Mr Lynch died when his £38million superyacht the Bayesian sank in a storm off Sicily last August. 3 3 Both men had been acquitted of fraud in June 2024 over the £8.6billion sale of Mr Lynch's software firm Autonomy to Hewlett-Packard in 2011. Mr Chamberlain died aged 52 from head injuries three days after being hit by a car while out running near his home in Longstanton, Cambs. An inquest found that the driver could not have avoided the father of two. Figures from the Probate Registry show Mr Chamberlain left £358,933 — reduced to £346,508 after debts were paid — to widow Karen and children Ella and Teddy. Lynch, 59, died alongside his daughter and five other people when his yacht Bayesian sank off the coast of Sicily. He had been celebrating his acquittal from US fraud charges when his yacht was knocked sideways by a sudden 80mph gust and started taking in water. As the boat sank rapidly, Lynch's wife Angela Bacares was pulled to safety by a crew member. But their 18-year-old daughter Hannah and five others on board never made it out. The vessel sunk in just 16 minutes after being hit by a violent downburst. Chamberlain was a former vice-president of software company Autonomy. Moment tragic Bayesian yacht wreck is raised from depths after billionaire Mike Lynch and others died on board 3
