mis-sold car finance and PCP claims
The team has longstanding expertise in group litigation work and is fully able to exploit all tactical and procedural opportunities as well as presenting a pitch-perfect legal analysis.
The team has longstanding expertise in group litigation work and is fully able to exploit all tactical and procedural opportunities as well as presenting a pitch-perfect legal analysis.
Our experienced group actions lawyers are currently investigating mis-sold car finance and PCP claims in which customers may have been misled about the choice of loan that they took when securing finance for a car or vehicle at any time before 2021.
The Financial Conduct Authority (FCA) confirmed at the start of this year that it would investigate whether those customers who took out loans on a PCP car finance agreement before January 2021 were unfairly charged more expensive interest rates in return for higher levels of commission paid to car dealers. It is understood that more than 16,000 complaints have been made to the Financial Ombudsman Service about mis-sold car finance since September 2022. Many of these complaints have been made by claims companies that believe we are witnessing a similar car finance mis-selling scandal to the payment protection insurance crisis which cost the banks £38.4 billion over a decade ago.
At Penningtons Manches Cooper, our specialist lawyers are building a large cohort of people who wish to pursue mis-sold car finance claims with a view to achieving a good outcome for everyone. If you took out a loan for car or vehicle finance and have reason to believe that you were not offered a competitive choice of financial products, you may have a PCP claim. Please complete the form below to find out if you are eligible for compensation.
In two recent decisions by the Financial Ombudsman Service, the borrowers concerned received more than £1,000 each to reimburse them for excess interest payments on their motor finance contracts. The claimants in both cases maintained that they were unaware they had paid a higher rate of interest which was then passed on to the dealer as commission. When the FCA banned discretionary commission arrangements and amended the rules on commission disclosure in 2021, it revealed that consumers would save £165 million a year in cheaper repayments.
The FCA’s comprehensive investigation will seek to give clarity to the potential level of car finance mis-selling and covers loans for both new and second-hand cars. PCPs have been used by the majority of car buyers in recent years and it is estimated that compensation payouts for mis-sold car finance nationwide could exceed £10 billion. Up to 95% of car finance deals taken out before January 2021 had some form of commission model. Alarmingly, in many instances, the higher the interest rate a customer was charged, the greater the commission the broker received.
The FCA expects its investigation into the financial mis-selling to conclude in September 2024 and will decide on next steps at that point.
If you took out a loan to purchase a car or other vehicle before 2021, then you may be eligible to claim compensation for PCP mis-selling. However, there are a number of factors which will need to be considered carefully by our legal team before confirming your eligibility.
You do not need to pay anything at this stage. If there appears to be a strong mis-sold car finance claim, our team may be willing to act on a no win, no fee basis. You will be given an option to agree to this at a later date.
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Our partners and associates have extensive experience in resolving highly complex matters of mis selling. Importantly, the team has acted on numerous group action claims.
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Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.
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