Start Your Claim Now
Simply complete the contact form below or telephone 0800 246 1361
Please note, you do not need to use a claims management company to make your complaint to your lender(s), and if your complaint(s) is not successful, you can refer it to the Financial Ombudsman Service yourself for free.
Why refunds are being given
Before 28 January 2021, it was common for some car finance lenders to allow a car dealer or broker to set the interest rate on a car finance agreement within a range. The dealer would get more commission from the car finance lender the higher the interest rate was. So, they had an incentive to set your rate as high as they thought you might accept. As the dealer chose the rate, this is called “discretionary commission”. This was not explained to the customers, so the commission is also called “undisclosed” or, in layman’s terms, “secret”. These discretionary commissions were charged on a lot of car finance for both new and used cars. On 28 January 2021, the FCA banned this in car finance.
This was unfair as:
You were not told about it;
If you had known, you may have negotiated to reduce it or looked to see if you could get finance at a lower rate;
The dealer didn’t do any extra work to justify paying extra commission.
Example:
This is what happened in a Black Horse case:
The Ombudsman found that Black Horse was prepared to lend to Mrs Y at any flat interest rate between 2.49% and 5.5%, with any amount over 2.49% going to the dealer as commission;
The dealer had discretion over what rate to charge. It set the rate for Mrs Y at 5.5% – the highest it could. This got the dealer the most commission;
The extra discretionary commission accounted for more than half of the interest that Mrs Y would have to pay;
Mrs Y was not told how large this commission was, nor that the dealer had set the interest rate and the commission;
The Ombudsman found that this was unfair.
To put this unfairness right, the Ombudsman ordered that:
Mrs Y should only have been charged the minimum interest rate of 2.49% and the extra commission amount she was charged should be refunded;
8% per annum statutory interest should be added to the refund.
Could this apply to your car finance?
3 things matter:
Was your finance taken out before 28 January 2021? (after that date discretionary commission was banned.)
Was your car finance either Hire Purchase (HP) or Conditional Sale (CS) or Personal Contract Purchase (PCP)? You can make a claim about all these types of car finance. (you can’t make a claim for Personal Contract Hire (PCH), sometimes called car leasing. And you can’t if you arranged the loan with a bank and it was not secured on your car.)
Were you charged discretionary commission? (We can find this out for you.)
What doesn’t matter:
If you are still paying the finance, you finished paying for it or you defaulted;
If you still have the car, if it has been sold, or repossessed;
How easy it was to pay the finance. That is irrelevant – this is a complaint that you were charged too much, not that it was unaffordable.
The Ombudsman can look at cases going back six years, or it can go back much further if you have complained within 3 years of finding out that there was a problem. And this is probably the first time you have heard about this! If your car finance is very old, there may be a problem if the lender has not kept any paperwork about it. But many very old PPI claims were won, so don’t let a worry about this stop you from making a claim with us.
How to make a claim
These commission arrangements were very common, but you need to know if your car finance included this sort of discretionary/undisclosed commission. So, the first step in making a claim is to find this out. We will contact your finance provider(s) and get all the relevant documents and contracts on your behalf to see if we think you have a compensation claim.
If we believe that you are due compensation, we will issue the complaint on your behalf.
How much you are owed will depend on the amount you borrowed. We aim to recover the extra commission amount you were charged by the dealership/lender.
For us to start the claim procedure, please complete the contact form above, and we will be in touch to advise of the next steps.
Our Fees Explained
No Win, No Fee - This means that if we are unsuccessful in the claim, then no fee is due to the business.
We only charge 25% on any successful claim any successful discretionary commission claim*. There are no hidden fees. This means if we are successful with your claim, you will receive 75%. For example, if you are rewarded £1,000, our fee would total £250.
Compensation may be used by your finance provider to reduce any outstanding liabilities, arrears, or debts you owe them.
*The only exception of charging 20% if the compensation value was between £25,000 - £49,999, and 15% if the compensation value was £50,000 or above.
The fee illustrations are not to be taken as an estimate of the amount likely to be recovered for you. (We have never received to date an offer of compensation exceeding £15,000 but are legally obliged to provide such fee illustrations to you).
There will be a delay before we get a reply from your finance provider
There is a delay before you get a reply. Normally a firm should respond within 8 weeks or you could send it to the Ombudsman.
But the Financial Conduct Authority (FCA) is examining the issue to make sure that, if you're owed compensation, you get it in the best way possible. In the meantime, they're pausing the 8-week deadline for providers to respond to complaints about car finance involving this type of commission. We will still complain to your provider, but they will not have to respond to our complaint until after 25 September 2024, at the earliest.
If we are then unhappy with the response we receive from the provider, we will have longer to take the complaint to the Financial Ombudsman Service.
Usually, you/we have to take your complaint to the Financial Ombudsman within 6 months of getting a final response from your provider, but they’re extending this by up to 15 months.
We will notify you of any future material developments in the progress of your claim on a regular basis.
