Your lender will not respond to your car finance claim until after the 25th of September. You can still submit your complaint in the meantime.

Car Finance Claims – Discretionary Commission Arrangements

Car Finance Claims – Discretionary Commission Arrangements

The main car finance claim you’ll be hearing about in the news is discretionary commission claims, which affect around 40% of car finance agreements. – This is the claim Martin Lewis has been addressing on the television!

However this isn’t the only car finance claim you should be thinking about, we’re seeing a huge number of claimants qualify for an irresponsible lending claim.

In both cases, it’s hard to know without the proper checks if your part of the scandal, so we recommend everyone with car finance since 2008 use one of our free checks to find out.

In the article you’ll find the answers to all the things you’ll want to know regarding your car finance claim, and how to get started!

    1. How did the Car Finance Claim start
    2. The types of PCP claims
    3. How do I know if I was Missold Car Finance
    4. How Much Will My Claim Be Worth?
    5. Which Finance Companies Can I Claim Against?
    6. How Long Will My Claim Take?
    7. I’ve Tried with Another Claims Company, They Said I Can’t Claim
    8. Choosing My Claims Centre for your Car Finance Claim
    9. The Car Claim Process
    10. Free Car Finance Claim Check

    How Did the Car Finance Scandal Start?

    Here’s a brief overview: the FCA did an investigation in 2017 which led to a ban on discretionary commission models on 28 January 2021.

    After the FCA banned these commission models, a huge number of motor finance complaints came in from claims management companies and law firms.

    The outcome given by the car finance companies and the Financial Ombudsman Service (FOS) showed no consistency.

    This left the Financial Conduct Authority no choice but to step in (February 2024) and pause the claim responses until they’ve set out a fixed redress system for car finance companies to adhere to.

    Black Horse has now set aside £450 MILLION! To prepare for these upcoming claims

    Most Common Types of PCP Claims

    Discretionary Commission Claims (DIC)

    Discretionary commission arrangements is made between the finance company and the car dealer or credit broker. This gave the dealership or broker the power to give you a higher interest rate for higher commission payment.

    This practice affects agreements from 2008 to 2021. In such cases, claimants are eligible to claim for any amount paid over the fair rate at the time.

    In some cases, you may have fallen victim to undisclosed commission on your vehicle finance. For example when is when the fee basis was not declared or made clear. This leads to an additional hidden commission claim that will be accessed on submission of your claim.

    The FCA found that almost 40% of car finance deals were structured in this way. Giving brokers the power to manipulate interest rates to their advantage, leading to higher costs for consumers without their knowledge.

    Irresponsible Lending Claims

    Irresponsible lending claims come about when the lender did not do sufficient checks before issuing the finance. You’re wondering so what, it was the agreement I wanted… Well the fact of the matter is the lenders have a responsibility to run certain checks!

    In general, these claims often result in higher average compensation amounts compared to the commission claims! This is down to the fact there is no ‘fair rate’ interest rate used in the compensation calculation.

    The main warning signs are when the lender fails to conduct adequate checks before approving finance. Including not verifying income, failure to account for existing debts and running a full affordability check.

    Once we gather all the necessary information from your lender. Our claim experts will access and choose the best option to pursue a claim.

    We aim to ensure you receive the maximum compensation by thoroughly evaluating both discretionary commission and irresponsible lending claims.

    How to Know If I Was Mis-Sold Car Finance

    So you’re wondering, “How do I know if I was mis-sold car finance?” It can be challenging to determine if you were part of the car finance scandal without a little support.

    We can only confirm this once we’ve collected all the relevant documents from your lender. Only then will we know what hidden costs and interest rates you could be eligible to claim back.

    Do you have the correct agreement for a mis-sold car finance claim?

    To qualify, you will need to have bought your car through a personal contract purchase agreement, and most of the time through a car dealer, also covering hire purchase agreements.

    You cannot claim if you leased, rented, or took a personal loan out to purchase the car. It doesn’t matter if it was a new or used car, or whether you used an online credit broker or a car dealership.

    As long as the car finance loan was structured with monthly payments, with the right to own at the end of the contract. In some cases with PCP agreements, you may have also had a balloon payment.

    You can start by checking for free on our portal.

    How Much Will My Claim Be Worth?

    The amount being claimed will be dependent on the loan size, APR, length of contract, number of payments made, and how long ago the payments were made (to calculate statutory interest).

    Differences in commission claim values are likely to be compensated with a reduction to the fair rate at the time of the agreement.

    If the lender did not act with due care when issuing your finance, you could reclaim all interest charges and additional fees paid on the agreement.

    In both cases, the claims will be increased by statutory interest, ensuring you are set back to the position you would be in if you had not been mis-sold. Usually 8% per annum.

    In one successful claim against Black Horse (Lloyds Banking Group), the client borrowed £7,619 at a rate of 5.5% (costing £2,096 over 60 months) with the lowest rate at the time being 2.49%.

    The ombudsman ordered a refund of all interest paid over the flat rate of 2.49%, plus 8% statutory interest.

    As the Financial Conduct Authority is still deciding how the redress should be set, they could decide it should be the full interest.

    My claims centre mascot with victory over black horse

    Which Finance Companies Can I Claim Against?

    Several companies have confirmed they used discretionary commission models, including Barclays Partner Finance, BMW Financial Services, Alphera, Black Horse, Santander Consumer Finance, MotoNovo, and Mercedes-Benz Financial Services, among others.

    For lenders that did not use discretionary commission models, we will assess you exclusively for irresponsible lending. This full assessment means no potential claim is overlooked.

    How Long Will My Claim Take?

    The Financial Conduct Authority has paused car finance complaints until September 25, 2024. It’s best to start your claim process as soon as possible. Almost all car buyers should have their agreements checked.

    Once the 25th of September comes, a ruling on how the redress should be given will be made by the FCA, with finance companies being given 8 weeks to respond and issue compensation.

    I’ve Tried with Another Claims Company, They Said I Can’t Claim

    Another firm might have told you they cannot progress with your claim. This doesn’t mean your claim is dead in the water.

    It may be that the claim did not fit the company’s criteria at the time, or it did not fit for DIC claims.

    If you believe this happened to you, the good news is that we have no restrictions now. We will fully consider all car finance claims.

    As long as the firm did not submit the claim to the Financial Ombudsman Service or a solicitor started court proceedings, we’re happy to progress with your claim.

    Head over to our portal to get set up in less than a minute!

    Choosing My Claims Centre for your Car Finance Claim

    Check All Claim Options

    We don’t just assess you for commission claims. We assess all possible claim options to ensure you receive the maximum compensation.

    It’s Free to Check

    We gather your documents and evaluate them for free. After that, you can choose to proceed with your claim with us.

    Positive Reviews and Trust

    We already have 30,000 clients and lots of positive feedback about our portal, agents, and the excellent service we offer.

    The Car Claim Process

    Step-by-Step Guide

        1. Submit Your Details: Start by entering your details into our user-friendly portal. You can add all car finance companies at once. It only takes a few minutes to sign a letter of authority and upload your ID.

        1. We Request Documents: We request documents using a data subject access request from the lenders. We may receive your agreements in a number of days, but some may take up to 8 weeks.

        1. We Do the Checks: Our experienced team will verify your claim details, handle all the paperwork, and communicate with the lenders on your behalf.

        1. Claim Starts: Once we verify your claim, we notify you to sign your no-win-no-fee agreement, and our trusted partners begin working on your case. They will fight to get you as much compensation as they can!

      Our AI-powered portal makes this process seamless and efficient, ensuring you get the best possible service.

      Free Car Finance Claim Check

      Now is the perfect time to claim for mis-sold car finance. Head over to the portal. You can get set up in less than 60 seconds, and we will handle all the heavy lifting. Claim for mis-sold car finance today!

      Our checks are free, and our legal partners work on a no-win-no-fee basis. You only pay a percentage of your claim if it is successful.

       

      Disclaimer

      You don’t need a claims management company to make a claim. You can contact the organisation directly and make use of the Financial Ombudsman Scheme if dissatisfied with the outcome.

      Start Your Claim Now

      Starting your car finance claim has never been easier. Get set up through our portal and check the progress of your claims 24/7

      Positive Feedback

      We’re proud of the positive feedback we get from our clients. People trust us because we get results and make the process easy and stress-free. Join the many happy customers who’ve reclaimed their money with My Claims Centre.