Millions Could Claim Compensation After FCA Car Finance Ruling
The Financial Conduct Authority (FCA) has dropped a bombshell on the car finance industry, announcing a major investigation into potential widespread mis-selling. This could open the floodgates for millions of UK drivers to claim compensation.
What's Behind the Scandal?
At the heart of the issue are discretionary commission arrangements (DCAs), where brokers could secretly increase interest rates to boost their own commissions. The FCA banned this practice in 2021, but now believes consumers may have been unfairly charged before the ban.
Who Could Be Affected?
- Anyone who bought a car on finance between 2014-2021
- PCP (Personal Contract Purchase) customers
- HP (Hire Purchase) agreement holders
- Those who feel they weren't properly informed about commissions
How Much Could You Claim?
While amounts vary, some estimates suggest successful claims could average £1,000-£3,000 per customer. The total industry payout could reach £13 billion if the FCA finds systematic wrongdoing.
What Should You Do Now?
- Dig out your old finance agreements
- Check if your lender used DCAs (your paperwork should show this)
- Consider registering with a claims management company
- Wait for the FCA's final ruling expected in late 2024
Industry Reaction
Major lenders are bracing for impact, with some setting aside millions in provisions. Consumer champion Martin Lewis has called this "potentially the biggest reclaim since PPI".
The FCA urges customers not to rush into claims yet, but to stay informed as the investigation progresses through 2024.
