Response to the Car Finance Scandal

Here, we delve into the issue of mis-sold car finance, the FCA  investigation, and how to claim if you believe you have been mis-sold. 

What was the issue with car finance mis-selling? 

January 2021; the FCA banned discretionary commission agreements.  However, high numbers of people submitted complaints over overcharged interest rates, despite the ban. Before the ban, lenders/brokers were encouraged to alter interest rates in order to gain a higher commission. 

What happened as a result? 

If you purchased a vehicle on finance through a broker/lender who used a DCA, it’s possible that you were overcharged.

What does the FCA have to say? 

The FCA are ‘examining the issue’ using powers under the Financial Services and Markets Act 2000 to look into sales and historical motor finance commission arrangements. This will be applied to several firms. Millions of drivers may acquire compensation after the FCA’s final verdict. 

‘May have been charged too much’ – The FCA regarding certain customers for car finance loans pre-January 2021. 

Have you been affected? 

According to the FCA, you may be affected if these factors apply to you:
Between your broker and lender; a discretionary commission agreement was involved before 28 January 2021, or you purchased a car using HP or PCP finance. 

How much compensation am I entitled to? 

If you qualify you can potentially receive a redress between £2k and £15k but it does depend on your finance agreement amount and APR. 

Who is eligible? 

If you financed a car using a finance agreement between 2007 and 2021, you might be eligible for compensation. 

Were you aware of the commission the dealership would receive? Did the dealer clearly explain the different finance options available? 
Could you afford the credit agreement at the time of the sale? 

Who is My Car Finance Claim? 

We are a trading style of Barings Law; one of the UK’s leading law firms specialising in financial redress claims. We have a proven track record in bringing successful claims against some of the UK’s biggest car finance providers. 

The financial lenders My Car Finance claim deals with are predominantly Moneybarn, Advantage and Oodle. 

How to claim? 

Claiming with My Car Finance is a simple 3 step process. With just a few details, you can begin an application today. Our team are here to do the rest. We can also contact your lenders and obtain the relevant information to assess the validity of your claim if you don’t have them to hand. 

Simple 3 Steps 

Submit your details on our three step form, our experts will meticulously analyse your claim, and if eligible, we can begin the process of getting your funds back. 

We aim to resolve things swiftly and where appropriate, get the compensation you deserve. Start your claim with us today and let our experienced team guide you the rest of the way. 

Click the button below to begin! 

Barclays Claim?

We explore the details involved in a Barclays claim.

Who are Barclay’s? 

Barclays are one of the UK’s leading specialist providers of car finance. Barclay claims began to rise after cases of potentially inflated interest rates were discovered after the practice was banned.    

History of Barclays? 

The history of Barclays can be traced back to John Freame and Thomas Gould. Their business transformed into Barclays bank after they began their business in 1690.  

How do we know Barclays Mis-Sold DCA’s? 

Barclays was named by the Financial Ombudsman Service, as a financial lender who misused DCA’s for car finance agreements.  

Examples of Mis-Selling?  

Two test cases were flagged by the FCA probe, after which the Financial Ombudsman Service issued an order for Barclays to pay compensation for using discretionary commission agreements without their customers’ knowledge.  

Have Barclays Prepared for Payouts?  

Barclays has set no provisions aside for Barclays claims as of yet. They spoke on the matter, saying that the conclusion was ‘unknown, including any potential impact’.  

Why Should you Check your Payments?  

Customers would be aware of their monthly payments,however they were not made aware that the interest charged could include commission. Customers should be aware of the options available in claiming for potentially making a Barclays claim.  

Mis-sold car loans or finance agreements can be overlooked. Therefore, you should always check if you qualify to make a claim.  

Who are My Car Finance Claim? 

My Car Finance Claim is a trading style with Barings Law, a law firm which proudly makes legal representation hassle-free and accessible for everyone. We take on clients on a no-win, no-fee basis. We will fight for your rights.  

How to Claim?  

Making a Barclays claim with My Car Finance is a simple 3 step process. With just a few details, you can begin an application today. Our team are here to do the rest. We will contact your lenders and obtain the relevant information to assess the validity of your claim.  

Start your claim with us today and let our experienced team guide you the rest of the way.  

Click the button below to begin!  

What Is A DCA?

What is a Discretionary Commission Agreement? 

If you are wondering what a discretionary commission agreement is then you have come to the right place. If you financed a car in the UK between January 2008 to January 2021, you probably spoke to a dealer who offered you an agreement for your car that had a hidden discretionary commission arrangement. 

In a nutshell, DCAs were used by dealers, acting as brokers for finance companies, who could discreetly increase or reduce the rate of interest they offered – thereby altering customers’ monthly finance charges – to boost their commission at the expense of their customers. This allowed the dealer to make more money by charging you more interest than they should have. 

Why could your car dealer do this? 

It sounds ridiculous right? Well, your dealer could do this under the now-banned use of ‘dealer discretion’ which is used to increase interest rates at will. 

How does a DCA work? 

If you want to understand exactly what a discretionary commission agreement is, imagine a scenario where you as a customer need to buy a car. The dealer or broker you speak to could offer you a base interest rate. However, increase this rate at their discretion to earn their commission. This leaves you overpaying without knowing. 

Now, if this happened to you, you would have been charged more for your car than you expected. Maybe you didn’t notice the added charge, because you simply did not look at the payment charges as they were taken from your account. The DCA is hidden in a higher interest rate- brokers would advise customers that it is the best deal and would not tell them that it includes DCA. 

Why would your dealer do this? 

Your dealer would have an obvious reason to raise your interest rate because this would count as their commission. They get more money, all from increasing your interest rate. 

Why are discretionary commission agreements problematic? 

The problem around these agreements is linked to their capability to cause conflicts of interest. You as a customer could be led into financial loss as a result. Understandably – consumers and regulators are concerned over this issue. 

Why did I not know about DCA’s? 

These raised interest rates are not clear to those unfamiliar with financial lingo, or contract term knowledge. Therefore it can be the case that those customers who are most vulnerable face higher financial loss due to these raised rates. 

What changed? 

In January 2021, the FCA banned using a discretionary commission agreement, making it illegal for dealers to use them.

Have you been a victim of this banned practice? 

If so, you may have the option to claim compensation for mis-sold car finance. 

How to claim? 

Have you noticed a higher interest rate on your finance agreement that you were unaware of? If so, you may have the option to claim compensation for mis-sold car finance. 

My Car Finance Claim works proudly as a trading style of Barings Law, who offer financial compensation for those victimised by mis-sold car finance loans. 

Click the button below to start your potential claim, using our simple 3-step process. 

MoneyBarn Claim?

Moneybarn is a leading lender specialist in the UK for vehicle finance. Moneybarn was involved in the mis-sold car finance scandal after they failed to communicate the consequences triggered by missing payments before the customer signed the agreement. As a result, Moneybarn claims began to rise. 

Is there evidence of Moneybarn irresponsibly lending? 

Yes, Moneybarn was given a fine of £2.77 million by the Financial Conduct Authority. Moneybarn failed to treat customers with transparency during times of financial difficulty with loan repayments. This happened between 1 April 2014 and 4 October 2017. They failed to communicate the risk involved if customers did not keep up with their payments. 

As a result more than 1,400 customers defaulted on their loans after they were placed into unsustainable short-term repayment plans. 

Did Moneybarn provide compensation? 

Yes, MoneyBarn paid more than £30 million in compensation to nearly 6,000 customers affected by the mis-selling. Moneybarn did not require any of these customers to prove their financial loss. 

Mark Steward, Executive Director of Enforcement and Market Oversight (FCA): ‘It also did not communicate clearly to customers, in financial difficulty, their options for exiting their loans and the associated financial implications, resulting in many incurring higher termination costs. These are serious breaches. ‘After discussions with the FCA, Moneybarn voluntarily paid more than £30 million in redress to customers potentially affected by its failings. 

Was my Moneybarn loan mis-sold? 

There are several ways listed below which may indicate Moneybarn mis- sold the loan due to your financial situation: 

Your disposable income was taken up largely by the loan repayment
One of your debts funded another. After repaying a loan, did you often borrow again or consolidate multiple loans? Loans you may have obtained from a single lender were consistently growing. You can still make a claim, even if you only became aware of the chance to claim, within the last three years. 

You can still start the process of making a claim even if you have forgotten the dealership who sold you finance, or if you can’t find the agreement. All you need is the company name you made the payments to. Your old bank statements should hold this information. 

How can I make a Moneybarn claim? 

Making a Moneybarn claim with My Car Finance is a simple 3-step process. With just a few details, you can begin an application today. Enter your registration into our automatic number recognition system to get started. Click the button below to begin and we will do the rest and make it hassle-free. 

Close Brothers

Here, we offer you insight into one of the largest finance lenders within the car finance sector.

Various customers of Close Brothers have encountered defaulted payments and problems with loan replacements, The cause of these issues are insufficient briefings of finance options. The rising amount of cases could be categorised as ‘lending irresponsibly’. If you were advised or convinced to take a loan while having inadequate savings or a low credit rating; there may have been negligence on their behalf.

Numerous Close Brothers customers may be eligible to seek compensation for mis-sold loans, and you could be, too. If you believe you fall into this category, our team at My Car Finance can help.

What is a Close Brothers car finance loan claim? 

Understanding the options available to you & your rights is vital. Especially if you have a loan you believe was mis-sold to you. There are set guidelines by the FCA which apply to lenders. These include a credit check, to ensure customers can afford to take out a loan. If you believe these checks were not taken, you could meet the criteria to claim.

Have you been mis-sold by Close Brothers? 
  • The finance deal was not properly explained to you by the salesperson. It may have been a case of this salesperson pushing you into making a hasty decision, without giving you chance to think.
  • A recommendation for a certain finance deal was offered to you with little or no attention to other options. You should have been given an array of package deals to choose from.
  • It was never made clear to you, if you or the dealer was accountable for any potential wear and tear.
  • The owner of the car was also never made clear. It can sometime be a third party firm in hire purchase.
  • You did not understand the contract you signed, if the salesperson did not explain the interest charges properly, As a result, you took a loan set on a very high rate interest.
  • There was no adequate clarity on the commission of the sale.
  • Affordability needs to be assessed, therefore if your expenditure and income was not checked properly, you had inadequate checks.
  • The consequences for breaking terms of your agreement may be strangely expensive.
Why are Close Brothers being claimed against? 

You may be aware of the banned discretionary arrangement established by The FCA in 2021. The banned practise involved dealers talking customers into a raised interest loan, encouraged by their finance broker.

Following this ban, a high number of customers sent complaints regarding requests for compensation and costs to the motor finance firms. The FCA made a statement that it would conduct a review of the motor finance sector dating back for one decade, issuing a warning that ‘an appropriate settlement’ would be made for those firms responsible for any misconduct found.

Close Brothers are are significant provider of car loans, but Lloyds Banking Group is named as the largest player. Estimated numbers set the possible finance provider liability as big as £15b. Instead of setting aside a sum for possible claims, Close Brothers believe they are ‘not required to recognise a provision in the group’s half year 2024 results in relation to this matter.’

How can I claim? 

Making a claim with My Car Finance is a simple 3 step process. With just a few details, you can begin an application today. Enter your registration into our automatic number recognition system to get started. Click the button below to begin!

Disadvantages of PCP – Car Finance

The disadvantages of PCP car finance can include potential mis-selling tactics, and general disadvantages as a driver.  

These tactics can involve ‘discretionary commission agreements’. Flagged within finance agreements, or if customers notice unexpectedly high charges on payments.  

Have you experienced the disadvantages of PCP? 

First, you need to understand what PCP is, you can find everything you need to know here.

To detect mis-selling, you need to be aware of the tactics detailed in this article. Once you are aware; you may be possibly eligible to claim compensation for car finance.  

Potential mishaps by your finance provider may provide you with an opportunity to claim compensation for faults which can cause you financial loss.  

How to spot these? 
  • Interest rates raised on your finance agreement unknown to you
  • No ownership possible unless a final balloon payment is made
Do you prefer to own your car? 

If so, PCP poses a disadvantage to you; unless you are willing to pay an expensive payment at the end of your contract which only then allows you ownership of the vehicle. The risk of this, is the final payment being much higher than the worth of the car itself.  

Are you prepared to pay a hefty deposit in cash? This option is not for every customer. A PCP agreement usually require a deposit upfront, and often expensive. This can pose a problem for those who are not in a position do this.   

Do you drive long distances? 

Did you you there are restrictions set on PCP-financed vehicles for exceeding the set mileage? 

Wear and Tear? 

Keeping your car in top condition is essential if you want to avoid wear and tear charges. 

How can I find out if I was mis-sold PCP? 

If you entered into such an agreement within the last 10 years, you’re potentially eligible for redress. Consider the following:

  • Were you aware if the commission the dealership would receive?
  • Did the dealer clearly explain the different finance options available?
  • Could you afford the credit agreement at the time of the sale?
What is a final payment? 

This is not common knowledge. To help you understand, imagine you have reached the end of your contract period, you are now given the opportunity to own the car, or swap it for another car and begin a new finance agreement. How do you own the car? By paying a final sum calculated by your dealer, often very high in price. 

What are the risks of breaching your contract?  

If you breach your contract and the finance company refuses to honour the Guaranteed Final Value (GFV), you are still required to pay the final payment.

How Can I Claim for PCP

Following the FCA car finance investigation, car finance claims are high in popularity.

Making a claim with My Car Finance is a simple 3 step process. With just a few details, you can begin an application today. Enter your registration into our automatic number recognition system to get started. My Car Finance Claim works as a trading style of Barings Law, who specialise in consumer redress. 

Click the button below to start a claim!  

What is PCP? Car Finance

Definition of PCP?

PCP essentially means Personal Contract Purchase but under the term of a type of car finance. Alternatively referred to as Personal Contract Hire or Plan. This is not 100% accurate, the official term is Personal Contract Purchase.

Hidden Fees on your PCP Contract?

Personal contract purchase agreements stand as the prevailing financial product for purchasing a car. Providing finance for vehicles for the majority of consumers, these agreements typically involve an initial deposit payment, followed by ongoing monthly payments, and finalising in a final ‘balloon’ payment.

If you entered into such an agreement within the last 10 years, you’re potentially eligible for redress. Barings Law specialise in consumer redress and manages cases for numerous clients across various claim types.

What is a Balloon Payment?

A balloon payment is typically a one off lump sum payment which is much higher than the monthly contributions paid during the contact.

Difference Between a Balloon Payment and a Normal Payment?

A balloon payment is much higher than what you expect to be paying, and set on a monthly basis.

Which Brokers and Dealers can I Claim Against?

Claims are typically directed to the lender who had ultimate control over how the financial arrangements were sold.

Why is the FCA Investigation Important?

In light of the FCA investigation, if you had a PCP or HP agreement between April 2008 – January 2022, you are now eligible to submit a claim.

If your lender is Moneybarn, Oodle, or Advantage then you are not eligible to make a complaint about discretionary commission arrangements. However, Barings Law are spearheading claims around affordability of the finance agreements so you may still be able to make a claim.

How to Claim?

Making a claim with us is easy and simple. With just a few details you can begin an application today. Enter your registration into our automatic number recognition system to get started.

What is the 3-Step Process?

Submit your details

Start by simply entering your details on our 3 step form

Our experts get to work

We have an experienced team of legal professionals, meticulously analysing and pursuing your claim

Get your funds back

Where we can successfully complete your claim, we will ensure your funds are transferred promptly

What is a Mis-Selling Example Case?

In 2018, a mystery shopper investigation by the FCA, found that only 11 dealerships out of 122 accurately disclosed the commissions they earned to the customer. Broker sales teams often set their own interest rates; which means the higher the rate, the higher the commission they received. The FCA banned this practice in January 2021 as it was a clear conflict of interest and provided unfair terms to the customer.

Is There a Cut-off Point to Claim?

You can still claim, even if your agreement has ended.

My Contract is Ongoing, Can I Still Claim?

If you took out an agreement before the ban of discretionary agreements in 2021 but it is still ongoing, you are eligible to claim.

Can I Claim for More Than One PCP/HP Contract?

Yes, you can claim for any of the following:

PCP or HP agreements you have had between April 2008-January 2022, or 2023, dependent on which lender you financed with.

How Much Compensation Will you Receive?

The compensation amount will vary on a case by case basis.

How is Your Claim Identified as Successful?

Barings Law reviews thousands of potential claims regarding financial regress. The key in determining if the case holds potential lies in the process of putting back together the deal background which hides the inappropriate practices of those arranging the finance. Consider the following:

Were you aware of the commission the dealership would receive?
Did the dealer clearly explain the different finance options available?
Could you afford the credit agreement at the time of the sale?

How Much will a Claim Cost?

We are proud to offer a no-win no-fee service. We ask for nothing upfront and in the event that your claim is unsuccessful, you won’t have to pay a penny.

Who is My Car Finance Claim?

My Car Finance Claim is a trading style with Barings Law, who proudly makes legal representation accessible for everyone. We take on our clients on a no-win no-fee basis. We always have our clients’ interests at heart and all we ask in return is that our clients cooperate with us throughout the process.

How Do My Car Finance Claim Get Your Compensation?

My Car Finance Claim specialises in financial redress claims. We have a proven track record in bringing successful claims against some of the UK’s biggest car finance providers.

Follow our simple 3-step journey and our team are here to do the rest. We will contact your lenders and obtain the relevant information to assess the validity of your claim. Our aim is to resolve things swiftly and where appropriate, get the compensation that you deserve. Start your claim with us today and let our experienced team guide you through the process.

What Do You Need to Start a Claim?

If you don’t have all of the information at hand, don’t worry! All we need to start the process of identifying if you have a potential claim is a few personal details; proof of address, and your finance agreement.

Why are PCP’s so High in Demand?

PCP contracts are high in popularity with customers as they give you the option to buy a car for worth more, lower monthly price than you could get with a conventional, or standard hire purchase or a personal loan.

PCP agreements are popular with manufacturers and dealers as this option fast tracks consumers into buying a fresh car every number of years. In turn, this significantly raises their chances of getting continuous business.

What Do You Need to Start a Claim?

If you don’t have all of the information at hand, don’t worry! All we need to start the process of identifying if you have a potential claim is a few personal details; proof of address, and your finance agreement.

What is GFV / Final Payment / Balloon Payment?

The guaranteed future value (GFV) is the amount that the finance company promises they will value the car at when your PCP comes to an end. That amount is exactly the same as the balloon amount, meaning that you can give the car back to the finance company without having to pay off the balloon. So the GFV covers the balloon, but it’s a different thing and only applies at the end of an agreement.

The balloon is the final instalment on a PCP, often thousands of pounds. This is the amount you must pay to settle the finance on the car to take clear title (this means to clear your debt to the finance company so that you can officially own the car) If you breach your contract and the finance company refuses to honour the GFV, you are still required to pay the final balloon payment.

How to Claim for PCP?

Making a claim, with My Car Finance is a simple 3 step process. With just a few details, you can begin an application today. Enter your registration into our automatic number recognition system to get started. Click the button below to begin!

Latest Financial Mis-Selling News From Martin Lewis

Martin Lewis; financial, English journalist and founder of MoneySavingExpert.com spoke on the probability of vehicle owners being owed compensation.

Martin Lewis, financial expert, English journalist and founder of MoneySavingExpert.com; recently shed light on a significant issue affecting vehicle owners. During a segment on the Martin Lewis Money Show, aired on ITV, he revealed concerning practices within the car finance industry. Lewis pointed out that certain finance firms allowed brokers and car dealers to control interest rates, resulting in inflated charges and undisclosed commissions. This revelation has far-reaching implications for individuals who purchased vehicles before January 28, 2021, potentially entitling them to substantial compensation.

In response to these findings, the Financial Conduct Authority (FCA) has initiated a comprehensive investigation into unjust car finance commission practices. Lewis emphasised that this investigation could lead to billions of pounds being refunded to millions of overcharged consumers.

Do You Fit This Criteria?

If you purchased a vehicle using finance before January 28, 2021, you may be eligible for compensation if your finance agreement involved discretionary commission arrangements.

Despite the lack of clarity surrounding these arrangements, affected individuals may have grounds for reclaiming overcharged interest once the FCA completes its investigation.

To determine eligibility for compensation, individuals must meet specific criteria:

  • Your vehicle was only used for personal use
  • Before January 28, 2021, you obtained your finance
  • You bought a vehicle using a finance agreement

Further Eligibility

Additional eligibility criteria may apply, such as reclaiming on behalf of deceased individuals or eligibility for specific finance types, like Hire Purchase or Personal Contract Purchases (PCP). Even if a vehicle has been repossessed or fully paid off, impacted individuals can still pursue compensation.

How to Claim

To begin the claims process, simply start by completing our quick online application.

The exact amount of compensation individuals may receive remains uncertain, with potential reimbursements ranging from full interest repayment to a percentage above a fair amount.

What Do My Car Finance Offer?

For those considering making a compensation claim, Barings Law offers legal expertise and assistance while, additionally exploring other lender practices that may warrant further claims, providing comprehensive support to affected individuals.