UK based car finance customers can claim for hidden commissions as well as unaffordable lending
CAMBRIDGE, CAMBRIDGESHIRE, UNITED KINGDOM, April 27, 2022 /EINPresswire.com/ — Claims Management Companies have previously concentrated on unaffordable lending when it comes to mis-sold car finance. Going forward they will process claims for hidden commission claims as well. This means more claims can be processed than was previously possible.
Unaffordable lending is where the borrower didn’t have enough income to pay back the loan as well as their other basic living expenses. However, this is not the only reason a borrower can make a claim. Hidden commissions refer to scenarios where the broker or car dealer sold the borrower the loan but didn’t disclose that they were getting a commission on the loan. In some cases, these hidden commissions caused the borrower to be offered higher interest rates than would otherwise have been available. While affordability claims are sent to the lender, hidden commission claims are generally sent to the broker.
As well as the loan being unaffordable, the following are reasons why an individual may be able to claim for a mis-sold car finance loan:
• The car salesperson did not explain they would receive a commission (Hidden Commissions) on the sale of the car
• The lender/bank did not fully explain the commission
• The salesperson skipped through the car finance agreement Terms & Conditions
• The customer felt pressured into the finance deal and was not given a range of options including explaining all of the differences in each type of product
• The salesperson did not make it clear who was financially responsible for the repairs to the vehicle.
• The salesperson did not offer the best interest rate available.
• The salesperson did not present, with complete transparency, the interest rates charged for all loan options and how they may differ.
This comes after a Financial Conduct Authority (FCA) investigation discovered widespread evidence of mis-selling on all types of vehicle financing options. They found that lenders were incentivising brokers and car dealers to charge their customers higher interest rates so they could receive higher commissions themselves.
The FCA estimate that hundreds of thousands of motorists might have been mis-sold finance packages. In some cases, customers are being overcharged by over £1,000 in interest. This resulted in the dealership obtaining a higher commission pay-out. The FCA estimates this could be costing consumers £300 million annually.
There are a few forms of Car Finance. The most common when it comes to mis-selling is Personal contract purchase (PCP) Finance. PCP claims tend to be the most valuable, as capital is generally paid back more slowly, so more interest accrues.
TheClaimsGuide.com help process claims against various types of lenders as well as diesel emissions claims.