Frequently Asked Questions
Here are a few answers to some of the questions you may have if you are considering lodging a claim due to mis-sold PCP car finance:
For how long was motor finance mis-sold using discretionary commission arrangements?
The Financial Conduct Authority (FCA) banned the use of discretionary commission models by motor finance lenders in January 2021. Motor finance lenders started to use this method of commission to Brokers and Motor Dealers as far back as 2007.
So how far does this go back?
Anyone could potentially claim compensation if they purchased a motor vehicle through PCP motor finance before 28th January 2021 and as far back as 6th April 2007. This is when the Financial Ombudsman Service (FOS) took over jurisdiction of motor finance complaints.
How do you know if you were mis-sold motor finance?
The best way is to first review the finance agreements you signed with a lender to see if you had a PCP agreement. You would them need to get in touch with the lender, either directly or through a representative like us, to ask them whether they had a Discretionary Interest Commission (DIC) also sometimes referred to as a Discretionary Commission Arrangement (DCA) with your broker or car dealer, in place.
Is it only related to a new motor car?
No, Discount in Commission (DIC) arrangements were in place for a wide range of new AND used motor vehicles including cars, motorbikes, vans or trucks for personal use only including commuting.
Was every PCP motor finance agreement mis-sold?
The FCA estimates 95 per cent of car finance deals had a commission model, and 40 per cent involved a crucial “discretionary commission arrangements” (DCA).
How much compensation could I receive if I was mis-sold?
The amount you could receive will depend on your original motor finance agreement. The FCA reported that on average a consumer who’s motor finance included DCA paid £1,100 more in interest than they would have done had the consumer taken a loan out directly with the lender. In addition, the FCA has indicated that you may be entitled to receive an additional 8% in interest payments per year on top of your claim.
How long does a complaint or claim take?
Each case is slightly different so time scales may vary. Depending on the path your complaint or claim follows, an outcome could be determined in as little as 10 weeks or as long as 18 months. The time starts from the end of the FCA Pause.
What is the FCA Pause and how could this impact my complaint or claim?
The FCA has suspended the 8-week deadline for motor finance providers to respond to a complaint or claim, the Pause. This is scheduled to end on 5th December 2025 when it is expected to report on its findings, however, the FCA, may at its discretion, change that date.
Can I claim for a deceased relative?
It may be possible to claim on behalf of someone who has died, though the motor lender may want to see a copy of the will and grant of probate to ensure any compensation goes to the correct person.
Do I need to use a third-party to represent me?
No, you can represent yourself to investigate and bring forward a complaint or claim directly with the motor finance lender.