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March 3, 2024
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What you need to know about major car finance investigation – could you be owed money?


The Financial Conduct Authority (FCA) this week confirmed it is reviewing if people who have taken out car finance have been charged too much

The FCA has announced a major new investigation regarding car finance(Getty Images)

We like to be ahead of the curve here at Mirror Money. For getting on for a decade now, we’ve been warning about car finance deals and mis-selling.

As recently as July of last year, I wrote about the problems waiting in the wings with these policies – and your rights. It’s been announced this week by regulator the Financial Conduct Authority (FCA) that it is reviewing if people have been charged too much for these car loans.




This is because there’s been a rush of over 10,000 complaints to the Financial Ombudsman Service (FOS) about excessive commission applied on these policies. The Ombudsman has upheld a few of these cases, potentially opening the door for a flood of cases.

This is all ludicrously complicated, so to summarise, if you were sold a car finance deal in the run up the FCA banning this type of commission in 2021, you could potentially make a complaint and be compensated.

One of the reasons why the FCA has made this announcement is to stop a rush of these complaints brought by claims management companies. Remember them? They’re the businesses that cashed in big time with PPI mis-selling, making a fortune for doing… very little work by making complaints to businesses and the ombudsman on people’s behalf. The Ombudsman has announced that it’s considering charging these claims mangers for bringing complaints – which is good news, because you don’t need to use them to make a complaint.

I spoke to my old mate and fellow broadcast consumer rights expert Alex Neill about this announcement. Alex told me: ”This intervention by the regulator is urgent and necessary. Millions of consumers have lost billions because they were charged inflated prices as a result of secret commission deals. Complaints have been queuing up at the Ombudsman and consumers need clarity to get back what they’re owed.”

If you’re reading this and thinking you might be affected, here’s my guide to what’s been happening, car finance deals and complaints.

What is a PCP loan?

If you’ve bought a car in the last decade, I’d be willing to bet you’ve taken out a Personal Contract Plan (PCP) to pay for it. PCP finance only arrived on the scene less than 15 years ago but has come to dominate the credit industry. Over 9 in 10 car finance deals involved PCP credit… Last year £51 billion in new car finance lending was agreed. In total, there are 6.2 million car finance contracts currently in operation – and many more that have ended. So the update from the FCA is a big deal.



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