Latest news with #carfinance
Auto Express
4 days ago
- Automotive
- Auto Express
Avoid using car finance claim firms, says financial watchdog
Consumers have been advised to steer clear of using car finance claim firms, as the UK's top financial watchdog says they could be spending money unnecessarily. The Financial Conduct Authority has begun setting out advice surrounding a possible redress scheme with regard to the ongoing car finance scandal which, according to experts, could see billions of pounds made available for potential claims. Advertisement - Article continues below However, with countless companies now popping up to assist potential claimants, the FCA is keen to remind motorists that in using one 'they may end up paying for a service they do not need and having to pay up to 30 per cent in fees out of any award they may receive'. Rather than utilise one of these paid services, consumers can submit timestamped complaints and claims themselves. Tools such as those on the MoneySavingExpert website can help people search for previous finance agreements, while the site also provides a template in order to draft a letter of complaint. With the Supreme Court set to make its judgement next month in regard to whether 'discretionary commission arrangements' (DCAs) were illegal in the first instance, the FCA is also advising finance firms on how they should calculate claims for disgruntled clients. The FCA is keen for a redress scheme to strike a balance between being fair to consumers, but at the same time not disrupting the market by putting finance firms out of business. In its latest release, the FCA says that the latter scenario could 'reduce competition and could make it more expensive for consumers to borrow money to buy a car in the future'. Such a scheme will fall under one of two arrangements: 'opt-in' and 'opt-out'. With the former – considered the most likely scenario – claimants would be required to notify their finance provider prior to a specified date if they wish to be considered for redress. 'Opt-out', on the other hand, would mean that everyone who is eligible will automatically be included, unless they contact their firm to be taken off the list. Consumers can expect the FCA to announce within six weeks of the Court's judgement in July as to whether a full redress scheme will be implemented, and how exactly it will operate. Tell us which new car you're interested in and get the very best offers from our network of over 5,500 UK dealers to compare. Let's go…
The Sun
6 days ago
- Automotive
- The Sun
Car finance compensation update as millions could be due back cash
THE Financial Conduct Authority (FCA) has issued a major update in the car finance compensation scandal. In a statement today, it said it will confirm whether customers will get redress within six weeks of a Supreme Court decision. 1 Should a redress scheme go ahead, it could see those who bought a car, motorbike or van on finance before January 28, 2021 owed thousands of pounds. The compensation case affects specifically those who were overcharged when they took out a loan to buy a vehicle.
Reuters
6 days ago
- Automotive
- Reuters
UK watchdog mulls scope of compensation scheme for motor finance scandal
LONDON, June 5 (Reuters) - Britain's Financial Conduct Authority on Thursday set out the considerations for a compensation scheme for customers affected by mis-sold car finance schemes, in what could become the country's next multibillion-pound consumer finance scandal. The FCA said it was awaiting a Supreme Court verdict likely due in July on whether to uphold a previous ruling that several such payments were unlawful, which could require a wide-ranging compensation scheme for millions of customers. The FCA said it was setting out the likely scope and considerations of any consumer redress scheme so it could move quickly to implement one if appropriate. Banks including Lloyds Banking Group (LLOY.L), opens new tab, Close Brothers (CBRO.L), opens new tab and Santander UK (SANS_pa.L), opens new tab have together already set aside more than 1.5 billion pounds ($2 billion) to cover potential compensation claims. Some analysts say the fallout could be the costliest for banks since they paid almost 40 billion pounds in compensation to customers for mis-selling payment protection insurance. The FCA said it would try to make a redress scheme comprehensive, swift, and easy for consumers to participate in, without resorting to claims management companies that take chunks of consumers' compensation in fees in return for helping with a claim. It also suggested that some estimates of how much customers might be due have been too high. "We've seen a range of redress rates suggested. This includes some highly speculative figures by some CMCs and law firms," the FCA said. Banks have argued a too-punitive scheme could harm a market that customers rely on to buy cars, and damage Britain's appeal as an investment destination for financial services. ($1 = 0.7378 pounds)
RNZ News
28-05-2025
- Business
- RNZ News
El Cheapo Cars to pay customers $340k after failing to give key loan information
Photo: Supplied/ Pixabay CC 0 Car dealer El Cheapo Cars will have to pay more than $340,000 to customers after pleading guilty to seven charges under the Credit Contracts and Consumer Finance Act (CCCFA). The charges were filed by the Commerce Commission and related to El Cheapo Cars' failure to give borrowers key information about their loans. It was also fined $115,000. Commerce Commission general manager for competition, fair trading and credit, Vanessa Horne, said the commission was particularly interested in protecting vulnerable consumer groups. "One of the commission's enforcement priorities is to take action where we consider motor vehicle finance lenders have not met their obligations under the CCCFA. We are particularly focussed on motor vehicle lenders who are providing credit to vulnerable consumers. "For many Kiwis the purchase of a car is one of the biggest financial commitments they will make. The CCCFA is there to protect consumers when they borrow money or buy goods on credit, and under the CCCFA, consumers have a right to be provided upfront information about any changes to their loan." El Cheapo Cars breached its variation disclosure obligations under the CCCFA when providing personal and vehicle finance to borrowers between 2015 and 2021. In his sentencing notes, Judge Sainsbury said disclosure obligations were among the most fundamental protections under the CCCFA. "Particularly those related to ensuring consumers are aware of their rights and obligations under the consumer credit contract." Horne said the decision was a win for consumers and borrowers, who could be entitled to compensation. El Cheapo will have to pay $341,931.46 to affected borrowers. "This case should send a strong signal to motor vehicle financiers that non-compliance with disclosure obligations will not be tolerated. "Transparency and accountability are fundamental to responsible lending and are key to building consumer trust and upholding market integrity." Borrowers who had a loan with El Cheapo Cars which was varied between 2015 and 2021 may be eligible for compensation. The commission said it would contact affected people shortly. The commission began its investigation into El Cheapo in October 2021, after a complaint.
The Independent
21-05-2025
- Automotive
- The Independent
Martin Lewis gives car finance claim deadline update
Martin Lewis has given an important deadline update when it comes to car finance scandal claims. The Money Saving Expert said he expected an update in July after the UK 's Supreme Court heard a case at the start of April, which many hope the outcome will determine whether they receive compensation. Financial providers have been accused of using discretionary commission arrangements (DCAs) to increase interest rates on motor finance. Around two-and-a-half million people have now put DCA claims in. Addressing the scandal on his Martin Lewis Money Show on Tuesday (20 May), Mr Lewis said: 'The people in the know are telling me the decision will be in July.'
