Was I mis-sold taxi finance due to hidden commissions?
0151-452-1017 Info@missoldcarfinance.org Honeycomb Building, Edmund Street, Liverpool, L3 9NR Arrange Call-back 0151 452 1017 Call Back More Information Was I mis-sold taxi finance due to
Millions of people in the UK may have been mis-sold car finance.
It was found in a FCA report that car finance consumers may have been overcharged and deceived when arranging their car finance deals.
You may be eligible to claimback car finance compensation if any of the below statements are applicable to you
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Find out fast if you have been mis-sold car finance and are able to make a no win no fee car finance claim today!!!
The FCA’s findings in March 2019 of inquiry revealed serious evidence of widespread unclear and excessive vehicle finance rates affecting millions of UK drivers.
Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA, has said “We found that some motor dealers are overcharging unsuspecting customers over a thousand pounds in interest charges in order to obtain bigger commission pay-outs for themselves. We estimate this could be costing consumers £300 million annually. This is unacceptable and we will act to address harm caused by this business model.
According to the Financial Conduct Authority (FCA), which conducted “mystery shopper” visits to 122 automobile dealerships, this is how it went…
There are a number of methods for a dealer or lender to mis-sell a car on finance.
The lenders must communicate with you fully about the deal you’re going to take so that you can understand the benefits, drawbacks, and worst-case scenarios.
The arrangement should be tailored to your needs and operate with your financial capabilities.
Car finance has been mis-sold in the same way many other financial products have.
The main issues have been that customers were not given enough information to make an informed decision, they were not aware of all their options or the total cost of the finance is provided.
Another big misselling point when it comes to car finance is incentivized commission structures.
this allowed car salespeople to earn more commission when they charged a higher rate of APR then
for more information on hidden commissions and whether am I entitled to car finance compensation click here
"If not properly managed, some of the commission arrangements in place could provide incentives for dealers to arrange finance at higher interest rates."
FCA final findings (Section 1.4)
It has been unveiled that lenders tend to conceal the existence of commissions offered to their brokers.
A mystery shopper exercise carried out in 2018 reviewed the processes followed by 122 retailers in their provision of Motor Finance.
Of those 122 retailers only 11 disclosed to the customer that commission may be received by the broker for arranging the finance.
This violates CONC requirements as it creates an unfair relationship between the customer and the lender.
The mystery shopper exercise mentioned earlier which was carried out by the FCA also wanted to investigate whether or not lenders fully disclosed all the necessary information regarding the Motor Finance agreements to be made. The shoppers found that the concept of ownership of a car under PCP was frequently brushed over or poorly explained. 69% of the mystery shoppers were not made aware by the broker that they would not fully own the vehicle until they had payed the final ‘balloon payment.’ The FCA concluded that they were ‘not satisfied that firms are complying with regulatory requirements.’
Lenders are required by law to give an APR of a Motor Finance Agreement so the customer may compare products, however, they are then free to give an equivalent representation of the APR.
A prevalent example comes in the form of flat rate interest. Flat rate interest is applied to the starting balance for the entire duration of the loan no matter how much of it is paid off.
This means that as a percentage value, flat rate interest is very low compared to other types of interest while still providing the same returns. In failing to clarify to the customer this key detail of their interest rates, lenders are in breach of UK consumer credit law.
There is concern over some dealers who are trying to get customers approved by second-string lenders if the customer has been declined by their primary lender.
This may result in much higher rates as the finance company they may get approval from will probably specialise in sub-prime customers as they were not able to get a check from the main lenders.
It appears that an alarming number of PCP companies have seemingly been acting without regulation.
They have been manipulating PCP’s to their own benefit at the cost of the consumer. Many brokers have been operating without the oversight of FCA regulators which is not only irresponsible but also illegal, this unfairly places the consumer in a very precarious position.
The Difference in Charge agreements showed a direct correlation between broker earnings and higher customer interest rates.
Only now are regulators clamping down on lenders to review their systems, revealing the fact that brokers have been earning higher commissions straight from the higher interest rates. The FCA warned that thousands of customers could be paying 50% more interest than necessary. This is also due to the consumers being made to take out more money than actually necessary and then have interest charged upon that higher number.
There are many different types of charges you can received through a mis sold PCP.
One of the charges is often from the ‘Mileage Limit’ which if exceeded, the fee could be very steep.
People are often not made aware of the exact details of the mileage limit so it becomes scarily easily to go over the limit and receive a charge.
The other fee to look out for is the ‘Wear and Tear’ because although you may believe you have kept the car in good condition, the dealers may count smaller things you were unaware of as a part of this charge and again the fees won’t be small.
It has been found that lenders often incentivise a broker to charge a higher interest by compensating them with a commission proportional to the interest the sell.
The estimated cost of this behaviour for the customers is £300m annually. An FCA consultation entitled : ‘Motor Finance discretionary commission models and consumer credit commission disclosure,’ found that Difference in Charge models are the most damaging to the customer which unnervingly consist of 95% of the 1000 agreements the FCA looked into.
If you have been mis-sold car finance, the amount of car finance compensation that you could be owed will vary depending on a number of factors.
This includes how much money you have already paid towards the purchase of your car, as well as how much commission was earned on the sale.
Generally speaking, if you can prove that you were not made aware of the commission being charged, or that the finance deal was unsuitable for you, you could be entitled to car finance compensation and make a no win no fee car finance claim.
Some motor dealers are overcharging unsuspecting customers over £1000 in interest charges in order to obtain bigger commission payouts for themselves. This is unacceptable.
Jonathan Davidson, director of supervision for retail and authorisations at the FCA.
There are a few ways that you can tell if you may have been mis-sold HP or PCP car finance. If any of the following apply to you, it is worth getting in touch with us:
– You were not made aware of the commission being charged on your car finance agreement
– The finance deal was unsuitable for you, and you were not advised of this
– You were pressured into taking out the car finance agreement
– The terms and conditions of the finance deal were not made clear to you
If you have any questions or would like more information, please do not hesitate to get in touch with one of our lawyers. They will be happy to help.
For more information on how to check if you were mis-sold.
I’ve been doing this work for 38 years and, frankly, we were getting away with murder. We weren’t treating customers fairly and were, in effect, charging them to earn us money. The FCA’s ban means all the wheeling and dealing is over. It’s not trying to stop us from earning money – just from taking the p*ss.
Anonymous finance broker, speaking to Autocar
Car finance deals can be confusing, and it can be easy to end up with a deal that is not right for you. This is known as mis-selling, and it can leave you out of pocket and struggling to keep up with repayments.
Here are some tips to help you avoid being mis-sold car finance:
– Do your research: make sure you understand exactly what is involved in the finance deal before agreeing to anything.
– Ask questions: if there is anything you don’t understand, ask the lender to explain it to you.
– Get advice: if you are unsure about whether a finance deal is right for you, speak to an independent financial advisor.
– Know your rights: you have the right to walk away from a deal at any time, so don’t feel pressured into agreeing to something you’re not comfortable with.
Here is a blog post on how to negotiate with a car dealer.
Find Out if You Were Mis-Sold For a Free
Are you eligible for a no-win-no-fee car finance claim?
A list of real-life scenarios to demonstrate how you may have been mis-sold a car on finance.
Example 1
Audi – A4 – Manual
Example 2
BMW – 3 Series – Manual
Example 3
Mercedes – A Class Saloon – Manual
Example 4
Ford – Mondeo – Manual
Example 5
BMW – X5 – Manual
Example 6
Nissan – Quashqai – Manual
The information shown below comes from the Financial Conduct Authority (FCA) in which the FCA sent mystery shoppers to 122 car dealerships; these were their findings…
Speak To One Of The Team About Car finance claims
Book a call with one of the team to see if you have been mis-sold your car finance & Eligible for a car finance claim.
Yes, all car finance claims will be taken on a no win no fee basis.
That means there will be no upfront fees when starting your claim.
A fee will only occur upon the successful collection of a car finance claim.
Upon collection of your car finance compensation, the legal team would charge 35%
A typical car finance claim can take up to 6-12 months, possibly longer.
This all depends on how quick your car financier takes to respond to the legal team managing your car finance claim.
When starting a car finance claim you will need a copy of your car finance agreement, proof of address, and also proof of identification like your driving license or passport.
At the top of your car finance agreement, it will either have “HP or PCP car finance agreement regulated b the consumer credit act 1974”.
Unfortunately at this time us and our mis-sold car finance solicitors will not take on PCH (a form of leasing).
It is mandatory for Car Finance Companies to keep records of all their customer’s transactions and dealings for at least 6 years.
You can certainly contact us in regards to checking but with commercial financing, it can be more difficult as the fiance was unregulated.
Once all correct documents have been received the legal team will instruct an expert witness to conduct a detailed report which will indicate if you have a claim and what they believe you have been mis-sold by.
You will usually receive the car finance claim report within 5-7 days.
Personal Contract Purchase (PCP) is effectively a personal loan which allows drivers to spread the payments for a vehicle over a long period, typically two or three years.
However, unlike a normal personal loan, you won’t be paying off the full value of the car and you won’t necessarily own it at the end of the deal (unless you choose to pay the final balloon payment).
PCP is one of the more complex financial products available to help you buy a car, but it can be broken down into three main parts: the deposit, the amount you borrow and the balloon payment.
The Financial Conduct Authority (FCA) regulates the financial services industry in the UK.
The FCA aim to make markets work well – for individuals, for business, large and small, and for the economy as a whole.
This includes car finance which covers several types of financial products you can take out when purchasing a car.
Dealers use PCP deals to draw in people who want to change their car every few years. 73% of new cars in 2014 were bought using PCP, making it the most prevalent financial product in the market.
If you paid off your Finance Deal more than 6 years ago, there may not be any available paperwork for you.
However, there have been cases in which claims have been made against cases of mis-selling over 20 years ago, often without paperwork.
Yes we will be able to deal with your motorbike claim as long as you still have your finance document you signed for.
The misconception around car finance is that the product being sold is a car.
This is only partly true. In fact, the main product that is being sold is a financial product – a loan.
The car is a red herring that has deflected the public eye away from this sector of credit broking meaning it has not been under as much scrutiny as, say, mortgages.
The concept of PCP itself is also relatively new.
If you are unable to remember your lender, we would not be able to commence the investigation unless we hold it in our own records.
The more details you can recall about your agreement, the more likely it will be that the finance company can locate and verify you against their systems promptly.
This will also help avoid requests for further information which can delay a decision being made.
I am very sorry to hear about your loss, but we are unable to continue with a further investigation unless you were also named on the account.
Dealers offering PCP finance will typically want around 10% of the value of the car as a deposit. Customers pay a deposit on the car they want and then make monthly repayments until the end of the term.
The amount you will have to borrow is based on how much value the finance company predicts the car will lose over the term of the deal (usually 24 or 36 months) minus the deposit you’ve put down.
You will pay this amount off during the deal, plus interest.
So, you are not paying off the full value of the car. Typical annual percentage rates (APRs) start from around 4%.
When the term ends, if you want to keep the car you need to make a lump sum payment (known as a balloon payment) in order to purchase the vehicle outright.
If you are not going to keep the car, you can hand it back without any further payments.
Alternatively, you can use any equity you have in the deal if the car has maintained more of its value than expected to put down as a deposit on a new vehicle, via a new PCP deal.
Compensation will vary depending on your original contract but most claims involving PCP agreements will be worth several thousands of pounds.
Claims will be made against the lender of the finance only.
The broker of the PCP agreement is considered an agent of the lender so the responsibility is on the lender to ensure their brokers behave according to the standards set by the FCA.
The proof of identification allows us to confirm you are actually the policy holder.
Every PCP / Hire Purchase case varies in value due to different criteria. We will only be able to give you a figure when we have received your finance agreement and have completed the auditing process and determined a successful or unsuccessful case.
This is a concept that means that if your case is unsuccessful, no solicitors fees or auditing fees will be charged to you, so the process will cost you nothing. A fee is only charged in the instance of a successful claim, so you will never be out of pocket and have nothing to lose.
Yes, you have 14 days cooling off period once you sign the CFA. This means that if you change your mind during this period, we can stop at your request.
Stay updated with all the latest news regarding mis-sold car finance here in the UK.
0151-452-1017 Info@missoldcarfinance.org Honeycomb Building, Edmund Street, Liverpool, L3 9NR Arrange Call-back 0151 452 1017 Call Back More Information Was I mis-sold taxi finance due to
0151-452-1017 Info@missoldcarfinance.org Honeycomb Building, Edmund Street, Liverpool, L3 9NR Arrange Call-back 0151 452 1017 Call Back More Information How do you know if you were
0151-452-1017 Info@missoldcarfinance.org Honeycomb Building, Edmund Street, Liverpool, L3 9NR Arrange Call-back 0151 452 1017 Call Back More Information Can i make a PCP claim in
0151-452-1017 Info@missoldcarfinance.org Honeycomb Building, Edmund Street, Liverpool, L3 9NR Arrange Call-back 0151 452 1017 Call Back More Information What Are Incentivised Hidden Commissions? By Jamie
0151-452-1017 Info@missoldcarfinance.org Honeycomb Building, Edmund Street, Liverpool, L3 9NR Arrange Call-back 0151 452 1017 Call Back More Information Different Types Of Car Finance & Examples
0151-452-1017 Info@missoldcarfinance.org Honeycomb Building, Edmund Street, Liverpool, L3 9NR Arrange Call-back 0151 452 1017 Call Back More Information Can I Claim For Mis Sold PCP
PCP’s are already puzzling enough to the average consumer, but this befuddlement is only exacerbated by the media’s own failure to grasp the full idea of what a PCP is.
The recently uncovered scandalous activities of many car dealers have had widespread implications after thousands of unfair deals were exposed.
In March 2019, the Financial Conduct Authority (FCA) released a document publishing their final findings on motor finance, specifically PCP car loans.
Moneybarn Ltd (Moneybarn) has today been issued with a fine of £2.77 million by the Financial Conduct Authority (FCA) for the unfair treatment of customers.
PCP stands for Personal Contract Purchase, it is a financial plan to help you obtain a motor for an average of 2-4 years by paying a monthly fee.
The finance plan is set up in three forms of payment.
See the example below to understand how it works. Imagine you sign up for a PCP over three years.
The vehicle costs £20,000 the finance company calculates that the vehicle will be worth at least £8,000 after three years. This is how it would look…
Importantly, even if you return the car, you will still have paid interest for the full loan amount (£18,000) over the three-year period.
For more information on the different types of car finance arrangements click here
Below you will find some of the most common companies in the UK that offer PCP or Hire purchase Agreements!
Yorkshire Bank | Oodle Car Finance | Click 4 A Loan | Santander | Ford Credit | Bluesky Personal Finance |
yesforcredit | On:Line Finance | Citroën | SAGA | Finance Worx | Blemain Group |
Yes Car Credit | NISSAN | Cavendish Finance Company | Rufford Credit | Finance Tracker | Blackhall Vehicle Sales |
Wonga | Nationwide Building Society | Cars of Distinction | Rainbow Finance | Fiat | Beech Finance |
Vauxhall Finance | Mercedes-Benz | carmoney.co.uk | RAC | Direct Auto Finance | Barclays |
Vauxhall | Lexus | Carlyle Finance | Premier Finance | Danske Bank | Bank of Scotland |
Ulster Bank | Jaguar | CarFinance247 | Phone-A-Loan | Cumberland Building Society | AutoQuoteDirect |
UKCreditshop | Halifax | Car Loan 4U | PFP Professional Financing | Creditplus | autobytel |
UK Loans Company | Guarantor Loans | Car Finance Concierge | Peter Gilbert Associates | Credit Connect UK | Auto Trader |
UK Loan Portal | Greenlight Finance | Car Finance Company | Perrys | Credit Acceptance UK | Audi |
UK Loan Company | Go4aLoan | Car Credit UK | Paragon Bank | Creation Finance | Arrange A Loan |
The Finance Network | GMAC UK | Cambridge & Counties Bank | Paragon | Co-operative Bank | Approved Car Finance |
Tesla UK | getfinancenow | Britannia Finance | Panic Loans | Coastal Credit | Alphabet (GB) Limited |
Simple Personal Loans | Freeway | BMW Financial Services | Origin Financial Services | Close Motor Finance | Alpha Car Loans |
Accept Car Credit | AA Loans | Allclear Finance | Origin Direct | Close Brothers | Alliance & Leicester |
Below are some useful links in regard to mis-sold car finance
In March 2019 the FCA released its final findings on the mis selling of pcp agreements.
https://www.fca.org.uk/publication/multi-firm-reviews/our-work-on-motor-finance-final-findings.pdf