Mis-Sold PCP Claims
According to FCA findings, car dealers were regularly using "Discretionary Commission Models" to manipulate interest rates so they could enrich themselves at the expense of consumers. This was seen as causing harm to unsuspecting customers by not acting in their best interests.
With around 8 in 10 cars purchased through Personal Contract Plan (PCP) deals, the Financial Conduct Authority (FCA) have uncovered that car dealers have been overcharging customers to earn salespeople more commission.
A recent Financial Conduct Authority (FCA) investigation uncovered that thousands of people in the UK have been subject to undisclosed commission on motor finance products, specifically Personal Contract Purchase (PCP) car loans.
Some UK dealerships are now in the spotlight following the two-year investigation by the FCA who report that this mis-selling has left individual customers £1000+ out of pocket, completely unaware that they have been cheated and mis-advised.
Lenders encouraged brokers and car dealers on numerous occasions to charge customers higher interest rates so they could receive higher commissions themselves.
Many dealers :-
Misled buyers regarding; interest rates.
Didn’t outline the commission they would receive.
Gave poor advice on how much their vehicle would be worth at the end of the deal.
Failed to advise if there would be penalty fees if you looked to switch your vehicle early.
Did not make customers aware of more suitable alternative finance options.
The FCA concluded that the widespread use of commission models, which allow brokers discretion to set the customer's interest rate and thus earn higher commission, can lead to conflicts of interest that are not controlled adequately by lenders.
Jonathan Davidson of the FCA said: "We found that some motor dealers are overcharging unsuspecting customers over a thousand pounds in interest charges in order to obtain bigger commission payouts for themselves.
"We also have concerns that firms may be failing to meet their existing obligations in relation to pre-contract disclosure and explanations, and affordability assessments.
"This is simply not good enough and we expect firms to review their operations to address our concerns."
You may have been mis-sold car finance if you received inadequate advice about your financing options or if you were not sufficiently informed about the commissions charged within your agreement.
You can benefit from our expertise, and you may be able to reclaim £1,000s.
If you feel you were mis sold car finance contact us today