Mis-Sold Car Finance Claims in Scotland
If you took out car finance between 2007 and 2021, you could be one of many Scottish car owners owed thousands in compensation. Enter your vehicle registration number to see if you are eligible.
An overwhelming majority of UK consumers opt to pay for new and used cars on finance, and it’s been estimated that hundreds of thousands of people could have been mis-sold. If you took out car finance between 2007 and 2021, you could be eligible for thousands of pounds in compensation.
What are mis-sold car finance PCP claims?
In January 2024, the Financial Conduct Authority (FCA) launched a UK-wide investigation into the use of commission payments in car finance agreements. The investigation originally focused on the use of a particular type of commission practice, known as ‘discretionary commission arrangements’ (DCA).
However, it is now suspected that consumers who took out finance which included any type of commission were likely not adequately informed that a commission payment would be made as part of their contract.
With 95% of vehicle finance agreements suspected to have included commission payments, this means that the majority of agreements made between April 2007 and January 2021 were likely mi-sold and consumers have a right to claim compensation.
At Slater and Gordon, we’re working hard to ensure those who have been affected receive the compensation they deserve. To speak to a member of our specialist car finance team, get in touch today and find out how much you could be owed.
Can I make a PCP claim?
It can be difficult to know if you’ve been mis-sold car finance, particularly if it’s been several years since you took out the contract. The FCA has said that you may have been affected by hidden commission if any one of the following are true:
- You bought a car under a finance scheme (such as a hire purchase or personal contract purchase) before 28 January 2021
- You have become aware of a commission arrangement between your lender and broker
- You were not aware of the commission being made to the dealership at the time of purchase
If you have been affected by any or all of the above, you could be eligible to claim compensation for mis-sold car finance.
Hundreds of thousands of Scottish car owners could be eligible for a mis-sold car finance refund. Find out if you’re owed compensation today.
What are the most common types of mis-sold car finance?
Undisclosed or hidden commission
It is thought that 95% of all vehicle finance agreements taken out between April 2007 and January 2021 included a form of commission payment.
It’s suspected that in most cases, consumers were not adequately informed their contracts included a commission payment and subsequently were incapable of giving informed consent. This means that finance agreements involving commission – no matter the type or level of commission – were likely mis-sold, and consumers have a right to claim compensation.
Inflated prices and interest rates
Under a discretionary commission arrangement, some brokers were offered larger commission payments if they were able to sign up customers to new contracts with higher interest rates, resulting in many people paying much more than they should have been. This could have left thousands of people out of pocket over a period of many years.
Not every type of finance will be suitable for every consumer, and it is a sales person’s duty to fully explain the details of any agreement on offer. This includes ensuring you are aware of all the alternative options and have the change to consider which option is right for you. Where this isn’t the case, people can be left feeling pressured into taking out an agreement that is not right for them.
Failure to conduct affordability checks
Whatever the agreement made between the credit broker and the consumer, brokers and lenders have an obligation to ensure that the agreement is affordable for the consumer and will not put them at any unnecessary financial risk. Affordability checks should always be carried, and where this is not the case, consumers can find themselves stuck with an unaffordable loan for years.
Finance companies mis-selling car finance
The FCA’s investigation is currently underway and is predicted to continue until May 2025. There are a number of finance companies and lenders suspected of mis-selling car finance.
If you have previously financed your vehicle, you may have unknowingly been mis-sold if you were inadequately informed of the hidden costs and interest rates and you could be eligible to receive compensation. It is worth getting in touch and finding out if you’re eligible.
We are happy to take on all complaints relating to vans, caravans, motorbikes, boats, planes or any other motor vehicles, but please note that the ongoing FCA investigation is in relation to cars only. The other categories of motor vehicle complaints will be explored with the Regulator moving forwards.
Do you think you have been mis-sold on your car finance agreement? Check your eligibility for a refund today.
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How is the amount of compensation calculated
The amount of compensation you receive for your mis-sold car finance will be dependent on a number of different factors, including:
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The difference in the interest rate you should have been charged, and the one you ultimately were
- You were not aware of the commission being made to the dealership at the time of purchase
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You were not aware of the commission being made to the dealership at the time of purchase
For some, this could amount of thousands of pounds. It’s also worth remembering that if you’ve taken out multiple finance agreements before 28 January 2021, you could be eligible to make more than one claim – each claim is made on the basis of a singular agreement, not an individual, as each contract that is eligible could have been made with different lenders.
Why choose Slater and Gordon for your car finance claim?
If you’re looking to make a car finance claim for compensation, our experts are here to help. Slater and Gordon represented over 4000 clients in the recent Volkswagen settlement in relation to diesel emissions in Scotland. We are lead solicitors in a similar claim against Mercedes in Scotland and are pursuing claims against a number of other manufacturers. You can be rest assured that your claim is in safe hands with our group action specialists.
At Slater and Gordon, we know that banks and financial institutions are not above the law. By joining our car finance group action, you’ll have the chance to hold these large corporations accountable for their actions. Check to see if you are eligible to make a claim using the form below.
Did You Purchase a Car on Finance Before January 2021? Find out if you qualify to claim.
Frequently Asked Questions
Am I eligible to make a car finance claim?
If you have taken out a car finance contract, such as a hire purchase (HP) or a personal contract purchase (PCP) agreement, before 28 January 2021, you could be eligible to make a car finance refund claim.
Currently, there is no firm indication of how far back the FCA investigation is going to go, as commission models such as DCAs were in use for many years before they were banned. However, it is a likely assumption that only contracts made after April 2007 will be considered, as this is the date the FCA took over the regulation of motor finance.
How do I sign up to make a car finance claim?
Signing up for a car finance claim doesn’t need to be a headache. At Slater and Gordon, we aim to make the process as stress-free as possible – to register your claim with us, simply enter your registration number at the top of this page, and we’ll do the rest.
Have I been affected by the mis-sold car finance scandal?
If you’ve taken out car finance between April 2007 and January 2021, you could have been affected by the use of hidden commission. To check your eligibility, enter your details above and we’ll let you know if you have a claim.
Can I claim for multiple finance agreements?
Yes, you can. This is because each claim is made in relation to a singular car finance contract. If you’ve had multiple vehicles on car finance between 2007 and 2021 which you think may have been mis-sold, you can make a claim for each one. Enter your details above to start your claims today.
How long will the claim take?
The length of time it takes to finalise a claim can vary. However, we’ll work hard to ensure you get the compensation you deserve and will keep you updated throughout the process.
How much will I be charged?
We operate on a no win-no fee basis which means there is nothing for you to pay if you aren’t successful in the claim. If you are successful, we’ll take a pre-agreed percentage as our fee.
News
UK car finance: ‘millions of drivers could get payout’ as watchdog investigates
Watchdog to investigate compensation over car loans
Enquiries
To contact Slater & Gordon Scotland please use the details below
carfinanceclaimsscotland@slatergordon.co.uk