The public have been aware of the FCA investigation for many months now. The conclusive results of the final review come September, may require banks to pay customers billions in return for mis-sold car finance.
Latest developments in car finance investigation?
Banks and lenders alike are told to wait and prepare for an incursion of claims.
Misuse of discretionary commission agreements are the root cause of this investigation. A tool banned in 2021 by the FCA, however this allowed firms to alter interest rates, with no verbalisation of this to their customers.
What have the FCA told banks to do?
An open letter by the FCA sending a written warning to car finance lenders detailed the following instruction:
Effectively, the banks in question have been told to “maintain adequate financial resources at all times [to cover] any additional operational costs from increased complaints and, where applicable, to meet the costs of resolving those complaints”.
Why were discretionary commission agreements banned?
Potentially higher commission, or the appearance of an attractive deal.
As with any investigative measure, opposing strokes are expected. Barclays instigated a judicial review, conflicting the claim that the bank “failed to act fairly and reasonably”. Now, the reason the FCA took investigative measures to Barclays followed this case: a customer was unaware of a £1,600 commission payment to the broker after signing their agreement.
Which banks have already prepared for payouts?
Lloyds Bank set aside £450m specifically for payouts. Why? A conclusive estimate of £16 billion was given by data analysts at the RCB (Royal Bank of Canada). For this reason, the FCA is warning lenders to prepare funds.
The FCA review is set for January, alongside plans to publish next steps come September.
How to claim for mis-sold car finance?
There is only one way to find out if you are eligible to claim for mis-sold car finance. Check your agreement, payments to your broker. Did you pay more than you thought?
We can help.
Who is My Car Finance?
We work as a trading style of Barings Law, who specialise in financial redress in mis-sold car finance claims.
We offer No Win, No Fee claims. You pay nothing to lose, but your money returned if you win.