Warning over mis-sold car finance that could see you lose HALF of compo cash (2024)

DRIVERS caught up in mis-sold car finance scandals are being warned not to risk losing half their compensation.

No-win, no-fee claims-chasing firms promise to claw back cash for customers, but they take a hefty chunk of the money.


Here, Samantha Partington explains how to find out if you are owed compensation — and how to keep the lot.


BEFORE January 2021, some car finance lenders allowed brokers who arranged loans to set, or increase, interest rates for customers.

It was known as a “discretionary commission arrangement”, and the higher they set your interest rate the more commission they earned.

Customers did not know this was in place or that they were paying over the odds for car insurance.

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The practice was banned in January 2021 by the Financial Conduct Authority.

Since then, complaints have rocketed, with more than 17,000 filed to the Financial Ombudsman Service.

The FCA told car finance firms to review their practices and fix any wrongdoing — but this hasn’t happened.

Around 30,000 motor finance complaints were dealt with by major lenders between January 2019 and the end of June 2023.

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Of these, 99 per cent were rejected because lenders do not think they have done anything wrong.

At the start of the year, the Ombudsman ruled that two complaints, one against Black Horse Finance, part of Lloyds Banking Group, and one against Barclays Partner Finance, be upheld and compensation paid.

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If the FCA decides a large number of customers are owed money it could set up an industry-wide compensation scheme.

It will report its findings on September 24.


CLAIM-chasing firms offer to fill in the paperwork and chase compensation for you, and while they are legal, experts slam them for taking a slice of the cash.

Consumer rights champion Martyn James said: “I’m deeply concerned that claims management companies, which often take huge chunks of your compensation for filling in a few forms, are aggressively moving into this sector.

“If you want to keep 100 per cent of your compensation, file the complaint yourself.”

Fees vary between firms — but they can take up to 50 per cent, plus VAT.

Drivers could also be charged a fee if they decide to cancel after instructing a claims company.



YOU must have used finance, which includes hire purchase agreements such as Personal Contract Purchases, to buy a car, van, campervan or motorbike before January 28, 2021.

Your lender or broker must have used a discretionary commission arrangement.

You may not know this but if you ask them, they have to tell you.

You are not eligible to claim if you took out a lease agreement or if your finance arrangement had a zero-per-cent interest rate.

Typically, complaints about any finance product need to be made to the provider within six years of a problem occurring.

If it has been longer than that, it should be within three years of you finding out there is a reason to complain.


YOU can complain to either your lender or the broker.

In your letter, state your full name, address and date of birth, your loan reference number, the date you bought the car and your car’s registration number.

If you took out the loan more than six years ago, tell the provider you have just learnt there may be an issue.

Ask them to tell you if there was a discretionary commission arrangement in place — and say that if there was, you want them to investigate your complaint about this arrangement.

There are lots of free templates available, from companies such as Consumer Voice, Which? and MoneySavingExpert, that can help you word your letter.


THE sheer volume of complaints has become too difficult for firms to deal with so the FCA has paused the usual eight-week deadline that companies have to respond to you.

Instead, they have until September 25 to reply.

James Daley, managing director of consumer group Fairer Finance, said: “Although firms don’t need to respond until the FCA has finished its review that doesn’t mean you can’t complain now.

“The watchdog may ask the industry to set up a mass compensation scheme but we don’t know that yet. The most important step is to get your complaint in as soon as possible.”

If you are unhappy with the outcome, you can take your complaint to the Ombudsman.

Their usual six months response time has been extended to a maximum of 15 months.



HUNDREDS of thousands of parents could be hit in the pocket by a shake-up of child maintenance payments.

The move, proposed by The Department for Work and Pensions, could see 430,000 parents pay more for their kids’ living costs.

But 260,000 would see fees cut if they keep up with payments.

Almost a million children receive payments through the service, and the majority of parents use the free Direct Pay service.

But around a quarter of a million use Collect & Pay, where the paying person is charged 20 per cent and the receiving one loses four per cent.

Under the new proposals, all parents would be forced to use the Collect & Pay service, albeit with reduced fees set at two per cent for all parties.

This means if the liability were £100, the paying person would contribute £102 (£100 liability plus £2 fee), while the receiving one would get £98.

The DWP said parents failing to make their payments would revert to the original 20 per cent fee as a deterrent.

Mel Stride, Secretary of State for Work and Pensions, told The Sun: “Child maintenance means the difference between a childhood with hope or one blighted by poverty. That’s why we are cracking down on the few who are shirking their duties.”

The consultation on the changes will run until July 31.

UNREGULATED online auto-switch tools meant to save households money on their energy bills may be doing the opposite.

It’s feared up to 20,000 bill payers could have this year been moved to a tariff that was more costly than if they had gone direct to the new provider.


Many were not even aware they were signed up to the auto-switch option, and some have not been able to move back to their original supplier, claims a report submitted to energy regulator Ofgem by provider Octopus Energy.

Auto-switch platforms were popular pre-2021 before energy costs jumped.

Some charged fees for the service but others appear to make money by charging customers a higher tariff than if they had sorted their own move.

In March this year, Octopus Energy said it received a surge of complaints from customers who only realised they had switched supplier after receiving a bill from the new provider.

Octopus found in some cases the new deal was £90 more expensive than if the user had gone direct. It also had exit fees included whereas there were none if the bill payer had gone direct.


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A spokesperson for energy regulator Ofgem said: “We’re grateful to Octopus for bringing this issue to our attention and are considering their findings.

"We expect both suppliers and third-party switching services to act in customers’ interests and make sure they communicate clearly. We’ll continue to work with industry, consumer groups and charities to ensure these rules work to protect consumers.”

Warning over mis-sold car finance that could see you lose HALF of compo cash (2024)


What is the discretionary finance scandal? ›

The UK Car Finance Discretionary Commission Scandal involves the practice, prevalent before January 2021, where lenders allowed brokers, such as car dealers and other car finance firms, to adjust the interest rates charged to customers on car finance loans such as Personal Contract Purchase (PCP) and Hire Purchase ...

What is the FCA car scandal? ›

In these cases, people were charged a higher interest rate to increase the commission the dealers got. And FOS ordered a refund. This is a scandal that may have affected millions. These FOS decisions open the way to a large number of claims for refunds from people who took out car finance before 28 January 2021.

How to claim against black horse finance? ›

To raise your complaint, you can:
  1. Write to us at Customer Complaints Department, St William House, Tresillian Terrace, Cardiff CF10 5BH, or.
  2. Call us on 0800 151 2449. Text Relay (NGT): 18001 0800 151 2449. If you're outside the UK, please call +44 (0)207 649 9015.

What is the PPI on wheels scandal? ›

The emerging scandal — being dubbed 'PPI on wheels' after the payment protection insurance meltdown of the late 1990s and early 2000s — could leave the banks that provide the loans with a £13 billion bill.

What is a scandal in finance? ›

Secondly, scandals are specific situa- tions where the authority of financial. and regulatory institutions is questioned. and put under the spotlight; their role is. interrogated and this can lead to public.

Which action decreases the discretionary financing needed? ›

Option c: Increasing the net margin will lead to a rise in the owner's equity through ways of raising the capital stock, reducing the discretionary need as when an organization has decided to grow, it will require spontaneous financing. This can be done by borrowing money or selling the entity's stock.

What is the FCA 3.6 lawsuit? ›

FCA Hit with Class Action Over Alleged 3.6L Pentastar V6 Engine Problems. A class action alleges the 3.6L Pentastar V6 engine found in certain 2014-2020 Chrysler, Dodge, Jeep and RAM vehicles suffers from a valve train defect.

What is the Stellantis controversy? ›

Deep Dive: Stellantis N.V.

After Stellantis' advisory remuneration report failed to achieve majority support at the 2022 AGM, the company engaged with investors and implemented significant structural changes, making all long-term incentives subject to performance and removing payouts for sub-median TSR performance.

What is the FCA accountable for? ›

To secure an appropriate degree of protection for consumers. To protect and enhance the integrity of the UK financial system. To promote effective competition in the interests of consumers.

How do I get a finance settlement? ›

All you have to do is get in touch with your finance company and ask them for a “settlement figure”. By law your lender has to post a settlement figure to you within 12 days – usually it will arrive straight away via email or in the post. It must be a letter headed official document.

What is the Toyota finance scandal? ›

According to website Lawyerly, Toyota allegedly allowed its dealers to set a higher interest rate on car loans above a base interest rate set by Toyota Finance, with the difference reportedly paid back to the dealers as 'flex commissions'.

What is the close brothers scandal? ›

One of Britain's oldest merchant banks has been forced to scrap a £100m dividend over a City watchdog investigation into the possible mis-selling of car finance. Close Brothers said investors would receive no payouts this financial year owing to “uncertainty” surrounding the Financial Conduct Authority (FCA) review.

How can you tell if wheels are fake? ›

Replicas are usually heavier and will have some notable differences on the front and significant differences on the back of the wheel. Replicas are sometimes adapted/modified to fit vehicles the originals were never intended to. Its worth noting that its almost impossible to replace replica wheels like-for-like.

What company owns fuel rims? ›

Fuel Off-Road Wheels Review

Brought to you by MHT Luxury Alloys, the same organization behind Rotiform. This organization has been around for a long time (since 1986) and has repeatedly proven itself. With numerous time-tested wheel brands under its umbrella, off-roading is right in their wheelhouse.

What company owns wheels? ›

2021 – Donlen is acquired by Athene Holding Ltd. In October of the same year, Athene purchased Wheels creating a global fleet organization with $5 Billion in assets, 100+ Fortune 500 clients, a wider product range and a highly diversified customer base.

What is meant by discretionary financing? ›

Discretionary Financing ("DF") is a financial service offered by the Bank that allows clients to settle their outstanding stock purchase at a longer period of time and at a lower cost.

What is discretionary finance? ›

The term "discretionary" refers to the fact that investment decisions are made at the portfolio manager's discretion. This means that the client must have the utmost trust in the investment manager's capabilities.

What was the financial scandal of the 90s? ›

List of biggest accounting scandals
1992 Indian stock market scam Harshad Mehta1992Fraud, market manipulation, money laundering
Informix Corporation1996
83 more rows

What is an example of a discretionary fund? ›

an amount of money that is available to spend on things that are not considered necessary but that may be useful: Governors of some states are given discretionary funds to spend on small-scale projects.

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