In a landmark decision that could see millions of Britons receive compensation, the Financial Conduct Authority (FCA) has ruled that unfair commission arrangements in car finance deals may have led to customers being overcharged.
What the Investigation Found
The regulator discovered that some lenders allowed brokers and car dealers to adjust interest rates on finance agreements to increase their commissions - a practice banned since 2021, but which may entitle customers to backdated claims.
Who Could Be Affected?
Anyone who purchased a car on finance between 2014 and 2021 using:
- Personal Contract Purchase (PCP) agreements
- Hire Purchase arrangements
- Other types of vehicle financing
Potential Compensation Figures
Experts estimate:
- Up to 40% of agreements during this period may have been affected
- Average compensation could reach £1,100 per claim
- Total industry payout might exceed £10 billion
How to Check If You're Eligible
Customers should:
- Gather documentation from your car finance agreement
- Check if the arrangement pre-dates January 2021
- Look for evidence of discretionary commission arrangements
The Financial Ombudsman Service has already handled over 10,000 complaints on this issue, with many more expected following the FCA's announcement.
