The car finance scandal means that millions of UK drivers could be owed payouts – and it’s free and quick to check if you’re one of them thanks to My Claim Group
Millions of UK drivers could be owed thousands of pounds – and you could be one of them. A new car finance scandal has come to light, which saw lenders paying undisclosed “secret” commissions to car dealerships.
This meant that car dealers could determine the interest rates on finance deals; the higher the interest, the larger commission they earned. That left Brits signing up for finance agreements with higher interest rates than necessary – and now, those affected could be due payouts of up to £4,000**.
Luckily, My Claim Group (MCG) is one of the groups on hand to help those impacted or who think they may have been affected get their money back – you can check if you’re owed money here.
The full scale of the issue has only recently emerged, with a major UK Supreme Court judgement due later this year.
According to My Claim Group, 40% of HP and PCP finance deals between 2007 and 2021 may have included secret commissions, leading consumers to unknowingly enter into finance agreements with inflated interest rates. Across 1.2million claims so far, MCG has helped vehicle owners to submit claims that could be worth £4,000 on average.
If you bought a car, van or motorbike via Personal Contract Purchase (PCP) or Hire Purchase (HP) before 28 January 2021, you could be due thousands of pounds.
The car finance scandal kicked off in January 2021, when the Financial Conduct Authority (FCA) stepped in and prohibited discretionary commission models to protect consumers. However, further investigations found that the problem has been going on as early as 2007, so there’s been a further examination of past lending activities.
By October 2024, the Court of Appeal declared that the non-disclosure of commissions on car loans was illegal. The financial fallout for lenders has been colossal, prompting the government to step in, with UK Chancellor Rachel Reeves voicing concerns about the wider economic implications and the possible effect on consumers’ access to car loans.
However, claims management firms like My Claim Group are urging consumers to lodge complaints.
The Supreme Court is currently examining a crucial appeal by car loan providers, following earlier judgements that sided with consumers. The FCA has temporarily halted the complaints process until the court’s verdict, expected later this year. The result of this appeal will play a significant role in establishing the liability of lenders.
If you suspect you may have been affected, head over to the My Claim Group website for more information and start the straightforward process to find out if you’re due a refund.
My Claim Group is a trading name of the Claims Protection Agency Ltd, regulated and authorised by the Financial Conduct Authority (FCA No. 836470). Our Free* check assesses your claim. *If you proceed, our panel solicitors work on a no win, no fee basis (subject to exclusions, for full details click on: https://myclaimgroup.co.uk/no-win-no-fee). Solicitors fees are up to 36% inc VAT. We receive a fee after a successful payout or a referral fee from your solicitor and this does not affect the compensation you will receive. You do not need to use a claims management company, you can claim for free directly with your lender or the Financial Ombudsman Service.
**See link for the FCA reference, solicitor fee tables & average valuations: https://myclaimgroup.co.uk/dca