Attention drivers, it is important to be cautious as there is a possibility of losing a significant portion of your compensation if you have been affected by the mis-selling of car finance. Claims management companies may offer to assist in the recovery of funds, but they often take up to 50% of the compensation, plus VAT. In this article, we will explore the eligibility criteria for compensation and how individuals can ensure they receive the full amount they are entitled to.
Prior to January 2021, car finance lenders permitted brokers to adjust interest rates using a “discretionary commission arrangement.” This allowed them to earn more commission by setting higher interest rates for customers. Customers were unaware of this practice and ended up paying more for their car finance without their knowledge. In January 2021, the Financial Conduct Authority prohibited this practice, resulting in a surge of complaints to the Financial Ombudsman Service.
Consumer rights advocate Martyn James advises individuals to file their complaints directly in order to retain 100% of their compensation, as claims management companies may take a substantial portion of the funds.
If you have utilized finance such as hire purchase agreements or personal contract purchases to purchase a car, van, campervan, or motorbike before January 28, 2021, and your lender or broker utilized a discretionary commission arrangement, you may be eligible to make a claim.
Directly addressing your lender or broker with specific details about your loan and requesting an investigation into the discretionary commission arrangement is the recommended approach to filing a complaint.
While the Financial Conduct Authority has suspended the typical eight-week period for firms to respond to complaints until September 25, it is advisable to file your complaint as soon as possible to ensure you do not miss out on potential compensation.
The Department for Work and Pensions is proposing changes to child maintenance payments that could impact a large number of parents. Meanwhile, concerns have been raised about unregulated auto-switch tools designed to save households money on their energy bills, as reports suggest that they may actually be leading to higher costs for consumers.
In conclusion, individuals affected by mis-sold car finance scandals must be aware of their rights and potential risks associated with claiming compensation. It is best to address any concerns directly with your lender or broker and seek support from reputable consumer rights organizations, if needed. Staying informed and taking proactive steps in managing your financial wellbeing is crucial.