Warning to anybody in UK who has a car on finance and ‘it’s widespread’

Mis-sold car finance claims have been paused by the regulator over fears motorists are wrongly being rejected. The Financial Conduct Authority (FCA) has put a pause on such complaints received by firms on or after 17 November 2023 up to 25 September 2024.

The FCA will check if “there has been widespread misconduct” and whether consumers have “lost out”. In 2021, the FCA banned so-called “discretionary commission agreements”, which is where brokers set a high interest rate for customers in order to make a better commission.

The consumer rights expert Martyn James says the behaviour of claims management firms in this area is similar to the multibillion-pound payment protection insurance (PPI) mis-selling scandal. “Mis-selling certainly seems to have been widespread when it comes to affordability – and the inherent complexity of how these deals work makes it very difficult to know where you are with the deal and what you will ultimately owe,” he adds.

READ MORE Met Office gives verdict on UK facing ‘worst snow for 14 years’

“The latest ombudsman data seems to be driven by the plague of claims management companies who previously dominated the PPI market.” James says: “Don’t use a claims manager to make a complaint. If you are unhappy, then just explain what you are unhappy with.”

“We are investigating the issues raised by these complaints carefully. We will continue to look at each case on its own individual merits and circumstances,” a spokesperson for the Financial Ombudsman Service said last year, issuing an update on the reported scandal.

“Our prediction is based on the current trend, and the fact that millions of motorists are likely to have been affected by PCP mis-selling but are only just starting to be aware of the issue,” says the firm’s Legal Director, Elaine Walker. “With PCPs still extremely widely used, the full extent of the mis-selling scandal could be bigger than PPI,” Walker suggests.