Latest news with #PaymentProtectionInsurance
Daily Mirror
28-04-2025
- Automotive
- Daily Mirror
2.8 million Brits already seeking payouts from car finance scandal - are you owed cash?
Millions of Brits have already begun to find out if they're owed thousands of pounds having wrongly been mis-sold car finance. This year motorists across the country could be in for a major windfall, with thousands of pounds potentially owed to them due to a car finance mis-selling scandal that's drawing comparisons to the infamous Payment Protection Insurance fiasco. Many drivers have been left out of pocket for years. What's more, many of them don't even realise that they're owed cash. As a court case connected to the scandal nears its end, companies such as My Claim Group (MCG) can help you find out if you can claim. This article contains affiliate links, we will receive a commission on any sales we generate from it. Learn more Find out if you are owed £1,000s without spending a penny You can start a claim with My Claim Group to find out if you are due a big payout. It's easy and takes just minutes to complete. My Claim Group Click here to find out if you're owed money At the heart of the scandal were undisclosed "secret" commissions paid by lenders to car dealerships, which have led customers to unwittingly sign up for finance agreements with jacked-up interest rates. The full scale of the scandal has only recently emerged, with a significant UK Supreme Court judgement expected later in 2025. This decision will determine the extent of the repayments car finance lenders will need to make to their customers. Find out if you're owed thousands of pounds today Can I claim back cash? If you purchased a vehicle through Personal Contract Purchase (PCP) or Hire Purchase (HP) before 28 January 2021, you might be entitled to claim back thousands. My Claim Group is on hand to assist those affected, or who suspect they might be, in reclaiming their cash. You can check how much you could be owed via My Claim Group. The company suggests that as many as 40% of HP and PCP deals from 2007 to 2021 may have involved these covert commissions, indicating that you may have overpaid and could now be eligible for compensation. MCG has already supported vehicle owners in lodging claims that could average around £4,000 each, with 1.2 million claims processed so far. What's the story behind the scandal? Prior to the regulatory shake-up in 2021, a significant number of car finance deals were built on "discretionary commission arrangements." These setups allowed car dealers the freedom to dictate the interest rates of their offered finance deals. The juicier the interest rate, the fatter the commission pocketed by the dealer. This arrangement led to an undeniable conflict of interest. Dealers were economically encouraged to flog loans at inflated interest rates to unsuspecting customers, chasing a plumper payday, regardless of whether such deals were the best fit for the consumer. This often went down without the customer being any the wiser to the commission model steering their terms. Consequently, many consumers were saddled with pricier loans than necessary, oblivious to the fact that their loan terms were skewed by the dealer's eagerness to swell their own profits. When did the dodgy dealings end? The Financial Conduct Authority (FCA) introduced a ban on discretionary commission models in January 2021. This move was intended to hike up transparency and offer greater protection to consumers. It emerged that these questionable lending practices had been going on since as early as 2007, leading to a sweeping probe into the history of the lenders' methods. A pivotal moment occurred in October 2024 when the Court of Appeal declared that the non-disclosure of commissions on car loans was illegal. This ruling broadened the scope for mis-selling claims, establishing a precedent that any hidden commission arrangements could now be a valid ground for consumer compensation. This judgement triggered a wave of complaints, with the Financial Ombudsman Service recording an all-time high of 18,658 new car finance cases in the last quarter of 2024. What's the current situation? The scandal led to government intervention. In January 2025, UK Chancellor Rachel Reeves stepped in to intervene in the Supreme Court case to shield lenders from potential multibillion-pound payouts, voicing concerns about the wider economic implications and the possible impact on consumers' access to car loans. At the same time, claims management firms like My Claim Group are urging consumers to lodge complaints. The Supreme Court is currently examining a crucial appeal by car loan providers, following earlier judgements that sided with consumers. The FCA has put a temporary halt on the complaints process until the court's verdict, expected later this year. The result of this appeal will play a significant role in determining lenders' liability. What can I do? If you suspect you've been affected by the scandal, head over to the My Claim Group website for more information and start the simple process to find out if you're due a refund.
Daily Record
28-04-2025
- Automotive
- Daily Record
More than two million Brits start claims as car finance scandal case concludes - are you owed cash?
You can find out if you're owed £1,000s and don't even realise it through a process that takes just minutes. Many UK motorists are discovering that they're in for a windfall due to a car finance mis-selling scandal, likened to the infamous Payment Protection Insurance (PPI) fiasco. Motorists could be in line for thousands of pounds in compensation without realising it. A lot of drivers found themselves out of pocket for years, unaware of the mis-selling issue until now. At the heart of the controversy are undisclosed "secret" commissions paid by lenders to car dealerships, which resulted in consumers signing up for finance agreements with higher interest rates than necessary. The full scale of the issue has only recently emerged, with a significant UK Supreme Court judgement expected later in 2025. This decision will determine the amount car finance lenders must reimburse their customers. Those who purchased vehicles through Personal Contract Purchase (PCP) or Hire Purchase (HP) before 28 January 2021 might be entitled to reclaim £1,000s. My Claim Group (MCG) is an organisation dedicated to assisting affected individuals, or those who suspect they may have been impacted, in recovering their lost funds. So far, more than 2.8 million people have got in touch with My Claim Group regarding potentially mis-sold car finance. Find out how much you could claim today The company suggests that secret commissions may have been part of 40% of HP and PCP deals from 2007 to 2021, indicating possible overpayments and eligibility for compensation. MCG has supported vehicle owners in lodging claims that could average around £4,000, with 1.2 million claims processed so far. For more information, check out our comprehensive guide on the car finance mis-selling scandal. When did this all begin? Prior to the regulatory changes in 2021, a significant number of car finance agreements were based on "discretionary commission arrangements." Under these terms, car dealers had the power to determine the interest rates on the finance deals they provided. The higher the interest rate, the larger the commission they earned. This arrangement led to an obvious conflict of interest, with dealers being financially motivated to push loans with elevated interest rates onto consumers, regardless of whether it was the most economical choice. Often, this occurred without clear disclosure of the commission structures to the customers. Consequently, many consumers ended up with loans that were pricier than necessary, oblivious to the fact that the terms offered were shaped by the dealer's aim to increase their commission earnings. The Financial Conduct Authority (FCA) stepped in and prohibited discretionary commission models in January 2021 to foster greater transparency and protect consumers. Nonetheless, subsequent probes revealed that many of these contentious practices had been ongoing since as early as 2007, leading to an extensive examination of historical lending activities. How big a deal is this? A significant turning point occurred in October 2024 when the Court of Appeal declared that the non-disclosure of commissions on car loans was illegal. This ruling broadened the scope for mis-selling claims, establishing a precedent that any undisclosed commission arrangements could now be a valid ground for consumer compensation. This decision triggered a wave of complaints, with the Financial Ombudsman Service recording a record 18,658 new car finance cases in the last quarter of 2024. The financial fallout for lenders has been colossal. In the wake of the Court of Appeal's ruling, Lloyds Banking Group has upped its provision for potential compensation payouts to £1.1 billion. Analysts are predicting that the total hit on Lloyds could surpass £4 billion. Other major lenders, including Santander UK, Close Brothers, and Barclays, are also staring down the barrel of substantial potential liabilities, with some industry estimates suggesting that total compensation costs could climb as high as £30 billion. What's the current situation? The scandal has led to government intervention. In January 2025, UK Chancellor Rachel Reeves stepped in to intervene in the Supreme Court case to shield lenders from potential multibillion-pound payouts, voicing concerns about the wider economic implications and the possible effect on consumers' access to car loans. At the same time, claims management firms like My Claim Group are urging consumers to lodge complaints. The Supreme Court is currently examining a crucial appeal by car loan providers, following earlier judgements that sided with consumers. The FCA has temporarily halted the complaints process until the court's verdict, expected later this year. The result of this appeal will play a significant role in establishing the liability of lenders. What can I do?
Telegraph
21-02-2025
- Business
- Telegraph
Lloyds ripped off car finance customers. Now it wants to play the victim
The Chancellor can't count, Donald Trump seems to have forgotten which side the West is meant to be on in Ukraine, and Britain's villages are disappearing into sinkholes. These are undoubtedly challenging times – so we should give thanks to the marketing folk at Lloyds, who clearly haven't lost their sense of humour. Take this snippet, for instance, from the bank's latest financial results: 'In 2024, we continued to help Britain prosper.' This from an organisation who in the very same press release revealed it has nearly tripled the amount being set aside to cover the car finance mis-selling scandal to £1.2bn. Perhaps it's the bank's imaginative new approach to putting money back in customers' pockets, yet I'm willing to guess that those affected would have preferred not to have been ripped off in the first place. That's really where the rubber hits the road in this sorry saga because the big banks are the world beaters when it comes to fleecing customers at every opportunity. Lloyds boss Charlie Nunn may reject the notion that the car finance scandal is 'PPI on wheels' – the issues around motor finance were not comparable to the PPI (Payment Protection Insurance) mis-selling crisis that engulfed the banking industry over a decade ago, he told the BBC on Thursday – but there are plenty of experts who think it could turn out to be very nearly as costly. Analysts at Moody's have estimated that banks could be forced to pay £30bn in compensation to customers, while HSBC number-crunchers believe the collective bill could reach more than £44bn. If so, then the parallels between the two would turn out to be entirely fair – the banks collectively forked out £50bn in PPI compensation in the end. Perhaps the very thought of the PPI debacle gives Nunn sleepless nights. After all, he might not have been in charge of Lloyds at the time but his bank was right at the very heart. It is the biggest player in this grubby market. Is it pure coincidence that Lloyds now finds itself more exposed to the car loans fallout? True, one could reasonably argue that it's merely a function of the bank being the biggest provider of such finance through its Black Horse arm. Yet industry figures and consumer campaign groups were warning for years that this was a potential mis-selling catastrophe waiting to happen. Did Lloyds fail to spot something that was long in the making? With analysts at KBW recently doubling the anticipated liabilities facing Lloyds, from £2bn to a 'conservative' £4.2bn, it looks as though the bank will pay a heavy price for being exposed to some highly questionable selling practices yet again. Shareholders must wonder whether there is something about the culture of Lloyds that means it has a far greater propensity to take on risk than its rivals, or indeed whether there is a governance deficit created by a board that is failing to ask sufficiently probing questions about its business practices. Lloyds spent nearly £22bn reimbursing customers over PPI. The next biggest bill was Barclays, and it was roughly half that amount. If KBW's predictions prove to be in the right ballpark, Lloyds will have paid out more than £26bn in restitution over the last decade. This is value destruction on a truly epic scale. Nunn seems particularly irked that the Court of Appeal widened the scope for claims, but its ruling that lenders and dealers should be clear about how much commission is at stake seems fair and common sense. In December, Nunn claimed the compensation threat hanging over banks was creating an ' investability problem ' for Britain, which is obviously poppycock. I'm willing to bet that investors care much more about whether this is a country that has fair rules and ensures everyone plays by them. Having also set aside £1.7bn of share buybacks in the fourth quarter alone, it's not as if the bank can't afford the scale of fines being banded around. So what exactly has got Nunn's goat? The big banks seem particularly guilty of exploiting what is a clear knowledge gap inherent in many of the products they sell. A car loan may be a fairly straightforward purchase on the face of it, but the truth is that a typical customer knows far less than the banks do about what it is they are actually buying. Many of us feel either totally bamboozled by personal finance or don't really think about the things we are signing up to properly. There is an argument that caveat emptor applies here; yet at the same time, it seems many finance providers and brokers are only too happy to exploit that naivety. The intervention of Rachel Reeves in this case is particularly outrageous. The Chancellor has absolutely no place whatsoever getting involved, as the Supreme Court has ruled, and her attempt to side with the banks over hard-working families is the mark of a weak character who has allowed herself to be completely charmed by bank lobbyists. Just as Nunn was wrong with his claim that investors were being put off the UK, Reeves's suggestion that the Court of Appeal's ruling is somehow a threat to growth is nonsense. Ironically, the banks know more than a thing or two about being anti-growth, whether it's by ramping up mortgage costs at the first opportunity or reducing returns on savings as soon as the Bank of England cuts rates. The same goes for shutting branches in the many thousands – every closure sucks cash from the local economy. What really grates is that the Chancellor isn't being entirely honest about the real reason for her interference. As The Telegraph has revealed, the Treasury is facing a £5.5bn hit to the finances thanks to an obscure piece of legislation. The law allows financial services companies that aren't banks, such as insurers and asset managers, to offset compensation payments against their corporation tax bills. Perhaps that's why the Treasury is in such a rush to defend lenders. The Supreme Court will decide in April whether to uphold the Court of Appeal's decision. In the meantime, the banks would do well to consider this: perhaps the sector would be more 'investable' if it could keep its nose clean for five minutes.
