Latest news with #DiscretionaryCommissionArrangement
Daily Mirror
18 hours ago
- Automotive
- Daily Mirror
Martin Lewis says car buyers from 2007-2021 could claim part of £18bn
Millions of UK motorists could receive a payout after the Financial Conduct Authority confirmed it will hold a consultation on a redress scheme on hidden car finance commission claims Car and van buyers across the country faced a blow after the Supreme Court dismissed the possibility of compensation for hidden commission payments on car finance loans. In a turn of events the Supreme Court quashed a previous ruling that might have led to millions of motorists receiving compensation for mis-sold car finance. The UK's top court sided with finance firms in two out of three landmark test cases, centred on commissions paid by banks and other lenders to car dealerships. This latest judgement overturns earlier court decisions that had opened the door for countless drivers to seek compensation. Nevertheless, there remains a glimmer of hope for many motorists who entered into a particular type of finance agreement known as a Discretionary Commission Arrangement (DCA). These deals, which were available on Personal Contract Purchase (PCP) and Hire Purchase agreements until 2021, allowed for the potential increase in loan amounts so brokers or dealers could earn higher commissions. Money Saving Expert founder Martin Lewis has offered guidance on his website regarding the situation. He has encouraged individuals to lodge a claim regardless, stating there's "no harm" in trying their luck for a payout. He advised his followers: "In recent weeks, I've been saying 'do nothing' as there was so much uncertainty. Now we're on a firmer base, on the back of what the regulator says, there's no harm in putting in a complaint to see if you had a DCA. Just do it yourself and use our free complaint tool.", reports the Express. He also mentioned: "This may be particularly beneficial in old cases, where you have the details of your car finance but the car finance firm may have deleted it - as this way you put a marker in that you want your case looked at (though again, specifics of this are up in the air). "In newer cases, complaining now is more about the fact many want to know if they had a DCA and whether they may be due compensation or not. So if you don't want the hassle, you likely wouldn't lose out by not putting one in at this point, so could just wait." The guidance follows the Financial Conduct Authority's announcement that it will consult on a redress scheme for hidden commissions in car finance deals, after uncovering that some motor dealers were given commissions from banks or finance companies providing loans, potentially leading to inflated interest rates for customers. The FCA is planning to consult over a compensation scheme, which could set the industry back anywhere from £9bn to £18bn, acknowledging that "it's hard to estimate precisely at this stage the total cost to industry of the scheme", but millions might stand to gain. The statement reassured those who have already lodged complaints that no further action is required on their part, while urging those who haven't to approach their car loan provider directly instead of engaging a claims management company. Nikhil Rathi, the FCA's chief executive, declared: "It is clear that some firms have broken the law and our rules. It's fair for their customers to be compensated." He continued: "Our aim is a compensation scheme that's fair and easy to participate in, so there's no need to use a claims management company or law firm. If you do, it will cost you a significant chunk of any money you get. It will take time to establish a scheme but we hope to start getting people any money they are owed next year." The controversy surrounding car finance mis-selling dates back to 2021 when the FCA put an end to DCA deals that allowed dealers to earn commissions from lenders based on the interest rates charged to consumers. The FCA highlighted that such arrangements incentivised dealers to impose unnecessarily high-interest rates, resulting in overpayments by buyers. Since January, the FCA has been deliberating on whether to issue compensation to individuals who entered into these agreements prior to 2021. The regulator announced plans to launch a consultation in October to determine eligibility and compensation amounts, noting that a recent Supreme Court decision has provided "clarity" on the matter.
Daily Mirror
7 days ago
- Automotive
- Daily Mirror
Martin Lewis gives urgent warning to drivers over slice of £18b compensation
The FCA is to launch a consultation within six weeks on a proposed redress scheme for drivers mis-sold car loans, following the Supreme Court ruling on the hidden car finance commission claim Martin Lewis has weighed in on the Financial Conduct Authority's (FCA) recent announcement about its official redress scheme for drivers who were mis-sold car loans, potentially opening the door to compensation claims. The move comes after a Supreme Court ruling that partially overturned previous decisions regarding hidden car finance commission claims, setting the stage for drivers to claim a share of an estimated £18 billion in compensation, with many individuals likely to receive £950 or less. In response to the news, Martin took to social media, advising: "Should you put a car finance complaint in now on the back of the regulator's new consultation? (No need to do anything if you've already complained)." In other similar news, Nationwide will pay £760 into accounts of customers who do one thing. Echoing the FCA's guidance, he continued: "Our advice remains that consumers concerned that they were not told about commission and who think they may have paid too much for the finance, should complain now." He also highlighted the potential savings for consumers by avoiding third-party services, stating: "We aim to make any scheme easy to participate in, without needing to use a claims management company (CMC) or law firm. Using a CMC or law firm may end up costing them up to 30% in fees of any compensation they receive." He continued: "My view on the back of this is there's no harm in putting a DIY complaint now to see if you had a Discretionary Commission Arrangement and it could be particularly beneficial in old cases where you have the detail of your car finance, but the car finance firm may have deleted it, as that way you put a marker in that you want your case looked at." "Though in newer cases, it's more that many want to know now whether you're likely due compensation or not, but if you don't want to hassle, you likely wouldn't lose out by not putting one in." The money guru broke down the two different types of car finance miss-selling for those caught up in the chaos, starting with discretionary commission arrangements, reports Birmingham Live. Martin explained: "That was banned in 2021. What could have happened last year, the regulator announced it would be investigating that and it is very likely people were miss-sold on that basis, is what we're thinking right now. What we were waiting for in the Supreme Court decision was if it said anything that stopped Discretionary Commission Arrangements being done, or a redress scheme being done by the regulator." He added: "There wasn't anything as far as I can see right now. So I suspect within the next 6 weeks, it will launch a consultation for a redress scheme. Which is why I have a very big warning: DO NOT sign up to a claims firm now if you're thinking of it, because it is absolutely plausible that you will get the redress without doing anything but the redress firm will want 25 or 30% of the money, even though it hasn't done anything. So sit on your hands right now, we're waiting to see what happens with the regulator."
Scottish Sun
09-05-2025
- Automotive
- Scottish Sun
Car finance mis-selling case: Everything you need to know
*If you click on a link in this article we will earn affiliate revenue Mis-Sold Motors Car finance mis-selling case: Everything you need to know THE car finance mis-selling scandal is everywhere, with motorists queuing up to claim a share of what could be billions of pounds in compensation. It's claimed that dodgy car dealers were pocketing extra cash from high-interest car loans, leaving drivers worse off. 2 Check if you could claim for mis-sold car finance below There's an upcoming court case that will put this to the test. If successful, anyone with a car finance agreement signed between 2007 and 28 January 2021 could make a claim. Could you be in line for some car loan compensation cash? In this in-depth article, Sun Motors experts will explain what the car finance misselling scandal is and why it matters to you. We'll also show you how you can register a claim through trusted provider My Claim Group. What is the car finance mis-selling case about? The majority of cars sold in the UK are bought with finance agreements. These loans enable drivers to pay a deposit and then spread the cost of a new vehicle over several years. It was discovered that car dealers, acting as loan brokers, earned a commission based on the interest rate charged to the buyer for Personal Contract Purchase (PCP) and Hire Purchase agreements. These cover about 40% of all car finance agreements. The higher the interest rate charged to the consumer, the more commission the dealer made. Basically, car dealers were incentivised to make loan agreements with higher interest rates. The practice, known as discretionary commission arrangements (DCAs), has left many drivers paying hundreds and even thousands of pounds more for their vehicles. 2 If you bought a car on finance between 2007-2021, you could have a claim. Credit: pexels The practice was banned by the UK's money regulator, the Financial Conduct Authority (FCA) in 2021. The FCA is also exploring where mis-selling took place on non-discretionary finance agreements, where car dealers didn't set the interest rates. It's less likely (but not out of the question) that these loans will also be part of this mis-selling scandal. Check if you could claim for mis-sold car finance below Car finance mis-selling - the timeline Here's a basic timeline of the current car finance misselling legal situation. Problem found (2019): The FCA found some car dealers were making more money by charging people higher interest rates for loans. The FCA found some car dealers were making more money by charging people higher interest rates for loans. New rules (2020): The FCA officially banned Discretionary Commission Arrangement (DCA), where dealers chose the interest rate to get more commission. The FCA officially banned Discretionary Commission Arrangement (DCA), where dealers chose the interest rate to get more commission. Changes start (2021): The ban came into force, which could save drivers money – around £165 million a year. The ban came into force, which could save drivers money – around £165 million a year. More rules (2023): A new rule called Consumer Duty came in, making sure companies put customers first. By the end of the year, over 10,000 people had complained about how commission was handled when they bought a car. A new rule called Consumer Duty came in, making sure companies put customers first. By the end of the year, over 10,000 people had complained about how commission was handled when they bought a car. Pause and review (2024): The FCA paused complaint handling so it could properly look into how car finance was sold, and whether people deserve money back. The FCA paused complaint handling so it could properly look into how car finance was sold, and whether people deserve money back. Court cases begin: Some companies challenged decisions in an attempt to block compensation. Some companies challenged decisions in an attempt to block compensation. Court of Appeal ruling (Oct 2024): The Court of Appeal made a judgment in the Test Cases, finding that it was unlawful for car dealers to receive a commission from loan agreements unless customers were made aware of this. This opens the door for compensation claims from millions of motorists. The Court of Appeal made a judgment in the Test Cases, finding that it was unlawful for car dealers to receive a commission from loan agreements unless customers were made aware of this. This opens the door for compensation claims from millions of motorists. What's next?: The FCA says it might bring in a refund scheme (called the Car Finance Redress Scheme). A final decision will come six weeks after the Supreme Court rules on the case. How do I know if I've been affected? If you're wondering if all this applies to you, here's how to find out. If you bought a car on finance between 2007-2021, you could have a claim. The easiest and quickest way to check if you're eligible to apply for compensation is to join one of the group claims against lenders. My Claim Group is one of the leading legal firms representing thousands of drivers on a no-win, no-fee basis. If you're confident of doing things yourself, you can use this MoneySavingExpert car finance misselling guide to make a free claim. Which firms are involved? The initial mis-selling scandal emerged after the FCA began investigating Barclays, says Which?. Some of the companies caught up in the finance scandal include high-street giants Lloyds, Santander and Barclays as well as Close Brothers. Don't worry if you don't know or can't remember who provides your car loan, My Claim Group can do all this for you. What is the average payout for a mis-sold car finance refund? The finance sector is taking this very seriously, with estimates for the total cost of compensation an eye-watering £16bn, says Which?. The massive figures represent the fact that DCAs were in place for almost 15 years, and could cover millions of loans. The situation is changing and there are several possible outcomes. If the Supreme Court sides with borrowers, the average compensation should be around £1,000. However, the precise amount depends on the amount of money borrowed and interest rates, so some could expect much higher payouts. Compensation could be paid on any loan agreement that has been mis-sold. This means you may be able to make multiple claims if you have owned cars and paid loans during this period. Check if you could claim for mis-sold car finance below When will the Supreme Court make a decision? The Supreme Court is expected to make a decision on the car finance mis-selling scandal at some point in 2025. We can't be more precise than that at the moment. Don't worry, you won't miss the announcement. This is likely to be big news for the public (and potentially bad news for the banks) Is it worth putting in a complaint now? Yes, it's important that you register your claim as soon as possible. The sooner you get your claim in, the quicker you could get any compensation that you are due. The good news is that registering your claim is simple and takes a few minutes. How do I complain? If you think you've been mis-sold car finance, the first step is to contact the company that gave you the finance. If you're not happy with their final reply, you can take your complaint to the Financial Ombudsman Service (FOS). But be aware: you might have to wait a while for that reply. Because of the sheer number of claims, the FCA says companies no longer need to respond within eight weeks. Now, finance companies don't have to reply to complaints about commission until 4 December 2025. If you're unhappy with the response, or you don't receive one, you'll also get more time to take your complaint to the FOS. Normally, you'd have six months after getting a final response. For these complaints, you'll now have 15 months, or until 29 July 2026, whichever is later. As we've explained above, you can do this all yourself if you've got the time and the MyClaimGroup will ask for some details about you, your name, current address and any previous addresses. This will kick off the claim process. You'll then be contacted with information on eligibility and how you can join My Claim Group. Check if you could claim for mis-sold car finance below
The Irish Sun
09-05-2025
- Automotive
- The Irish Sun
Car finance mis-selling case: Everything you need to know
THE car finance mis-selling scandal is everywhere, with motorists queuing up to claim a share of what could be billions of pounds in compensation. It's claimed that dodgy car dealers were pocketing extra cash from high-interest car loans, leaving drivers worse off. 2 Check if you could claim for mis-sold car finance below There's an upcoming court case that will put this to the test. If successful, anyone with a car finance agreement signed between 2007 and 28 January 2021 could make a claim. Could you be in line for some car loan compensation cash? In this in-depth article, READ MORE IN MOTORS What is the car finance mis-selling case about? The majority of cars sold in the UK are bought with finance agreements. These loans enable drivers to pay a deposit and then spread the cost of a new vehicle over several years. It was discovered that car dealers, acting as loan brokers, earned a commission based on the interest rate charged to the buyer for Personal Contract Purchase (PCP) and Hire Purchase agreements. These cover about 40% of all car finance agreements. The higher the interest rate charged to the consumer, the more commission the dealer made. Basically, car dealers were incentivised to make loan agreements with higher interest rates. Most read in Motors The practice, known as discretionary commission arrangements (DCAs), has left many drivers paying hundreds and even thousands of pounds more for their vehicles. 2 If you bought a car on finance between 2007-2021, you could have a claim. Credit: pexels The practice was banned by the UK's money regulator, the Financial Conduct Authority (FCA) in 2021. The FCA is also exploring where mis-selling took place on non-discretionary finance agreements, where car dealers didn't set the interest rates. It's less likely (but not out of the question) that these loans will also be part of this mis-selling scandal. Check if you could claim for mis-sold car finance below Car finance mis-selling - the timeline Here's a basic timeline of the Problem found (2019): The FCA found some car dealers were making more money by charging people higher interest rates for loans. New rules (2020): The FCA officially banned Discretionary Commission Arrangement (DCA), where dealers chose the interest rate to get more commission. Changes start (2021): The ban came into force, which could save drivers money – around £165 million a year. More rules (2023): A new rule called Consumer Duty came in, making sure companies put customers first. By the end of the year, over 10,000 people had complained about how commission was handled when they bought a car. Pause and review (2024): The FCA paused complaint handling so it could properly look into how car finance was sold, and whether people deserve money back. Court cases begin: Some companies challenged decisions in an attempt to block compensation. Court of Appeal ruling (Oct 2024): The Court of Appeal made a judgment in the Test Cases, finding that it was unlawful for car dealers to receive a commission from loan agreements unless customers were made aware of this. This opens the door for compensation claims from millions of motorists. What's next?: The FCA says it might bring in a refund scheme (called the How do I know if I've been affected? If you're wondering if all this applies to you, here's how to find out. If you bought a car on finance between 2007-2021, you could have a claim. The easiest and quickest way to check if you're eligible to apply for compensation is to join one of the group claims against lenders. If you're confident of doing things yourself, you can use this Which firms are involved? The initial mis-selling scandal emerged after the FCA began investigating Barclays, says Some of the companies caught up in the finance scandal include high-street giants Lloyds, Santander and Barclays as well as Close Brothers. Don't worry if you don't know or can't remember who provides your car loan, What is the average payout for a mis-sold car finance refund? The finance sector is taking this very seriously, with estimates for the total cost of compensation an eye-watering £16bn, says Which?. The massive figures represent the fact that DCAs were in place for almost 15 years, and could cover millions of loans. The situation is changing and there are several possible outcomes. If the Supreme Court sides with borrowers, the average compensation should be around £1,000. However, the precise amount depends on the amount of money borrowed and interest rates, so some could expect much higher payouts. Compensation could be paid on any loan agreement that has been mis-sold. This means you may be able to make multiple claims if you have owned cars and paid loans during this period. Check if you could claim for mis-sold car finance below When will the Supreme Court make a decision? The Supreme Court is expected to make a decision on the car finance mis-selling scandal at some point in 2025. We can't be more precise than that at the moment. Don't worry, you won't miss the announcement. This is likely to be big news for the public (and potentially bad news for the banks) Is it worth putting in a complaint now? Yes, it's important that you register your claim as soon as possible. The sooner you get your claim in, the quicker you could get any compensation that you are due. The good news is that registering your claim is simple and takes a few minutes. How do I complain? If you think you've been mis-sold car finance, the first step is to contact the company that gave you the finance. If you're not happy with their final reply, you can take your complaint to the But be aware: you might have to wait a while for that reply. Because of the sheer number of claims, the FCA says companies no longer need to respond within eight weeks. Now, finance companies don't have to reply to complaints about commission until 4 December 2025 . If you're unhappy with the response, or you don't receive one, you'll also get more time to take your complaint to the FOS. Normally, you'd have six months after getting a final response. For these complaints, you'll now have 15 months , or until 29 July 2026 , whichever is later. As we've explained above, you can do this all yourself if you've got the time and the Check if you could claim for mis-sold car finance below
Yahoo
11-03-2025
- Automotive
- Yahoo
Am I entitled to an automatic payout for mis-sold car finance? What you need to know
Millions of drivers who have been mis-sold car insurance could be entitled to an automatic payout of around £1,140 after the UK's financial regulator announced plans for a possible redress scheme. The Financial Conduct Authority (FCA) said in a statement today that it is carrying out a review into lending practices in the motor trade. The regulator said that if it finds customers have lost out due to "widespread failings" of firms, it will "consult on an industry-wide redress scheme". And while the announcement is not confirmation, finance journalist and Money Saving Expert founder Martin Lewis said "consult" meant, in effect, that the FCA had "made up its mind". He added that if the plan does go ahead, lenders will be required to "proactively contact all borrowers who met the mis-selling criteria" and offer them a fixed redress. However, whether this goes ahead may depend on a Supreme Court ruling on the mis-selling of car loans. Here, Yahoo News explains what you need to know. If you've used finance to buy a car, motorbike or van, it's "very likely" that the lender paid commission to the broker - the person that arranges your loan, usually your car dealer - for arranging the loan", the FCA has said. That's one of the central issues at the heart of the FCA's review into motor industry finance, and the subject of a Court of Appeal ruling on three cases in October 2024. The court decided it was against the law for the dealers to receive a commission from the lender without first telling the customer about the commission and getting their informed consent to the payment. Informed consent "will depend on the facts of each case", the FCA said, but in these particular cases, it included telling the customer about the amount of commission and how it was calculated. The lenders involved in the case have taken it to the Supreme Court to challenge it, but unless judges overturn the ruling, which is now law. While the FCA already appears to have its sights set on a redress scheme, the regulator has said it will confirm within six weeks of the Supreme Court's decision whether it will propose introducing one. The case is due to be heard on 1 to 3 April. As Lewis explains, the FCA is looking at two main types of car finance mis-selling. Discretionary Commission Arrangement (DCA): This arrangement, which covers about 40% of car finance deals, allowed brokers and dealers to increase the amount of interest they charged customers without telling them, on PCP and Hire Purchase agreements up to 2021 – resulting in a secretly increased commission. Commission Disclosure complaints: This relates to the Court of Appeal's ruling that if car finance agreements didn't make it clear to consumers all details of commission, including the amount, they were unlawful. Lewis says this applies to up to 99% of car finance cases. If you took out a deal that meets these above criteria, you may be entitled to compensation if the FCA's redress scheme gets off the ground. However, Lewis raises the possibility of the Supreme Court overturning the Court of Appeal's ruling on Commission Disclosure complaints, which came as a surprise to many, meaning only DCA customers would be eligible for compensation. While it has not been confirmed how much buyers would be entitled to, Lewis said the typical payout for a DCA claim is £1,140. Under a redress scheme, providers (lenders or brokers) would have to decide if customers had lost out and then offer compensation where appropriate, the FCA says. The regulator would set the rules for providers to follow and would check to make sure they are sticking to them. This means that under this redress system, lenders would be proactively required to contact you if you have been mis-sold insurance. For this reason, Lewis says there is now "far less need" to complain directly, although this has not been confirmed by the regulator yet. Many asking questions like "how will they contact me if I've moved house?" without being rude, it's too early. This is a statement of intent by FCA but we're not into the nitty gritty yet. Don't worry though they'll be on it and if not my team and I are and we'll be chasing and… — Martin Lewis (@MartinSLewis) March 11, 2025 On its website, the FCA still invites people to make complaints about commission, first by getting in touch with your lender or broker, explaining why you want to complain and providing key details such as your policy number, date of agreement, address at the time of the agreement and registration plate. Once you've made a complaint, your provider should send you an acknowledgement within eight weeks, the FCA says. If it doesn't, you should send a follow-up message, although the firm won't have to send a final response until after 4 December this year, the regulator adds. If you're unhappy with your provider's response, the FCA advises you to complain through the Financial Ombudsman Service, here. Top 10 best cars for first time drivers in 2025 (Daily Record) Millions of drivers face paying 'needless' one-off charge of £55 in March (BirminghamLive) Exact date you should turn your heating off and it's later than usual (Yahoo Life)
