You could be one of a rising number of people in the UK who were mis-sold car finance.
An investigation by the Financial Conduct Authority found that banks and dealerships that failed to declare income on Discretionary Commission Arrangements (DCA) could be made to pay back millions of pounds in compensation to customers. This could include all or part of your finance agreement, including interest.
This FCA Investigation has uncovered that hidden commission was paid on as much as 95% of car finance agreements in the UK, including:
- Cars purchased using PCP Personal Finance Agreements.
- Cars purchased using HP Hire Purchase Agreements.
- Both new and second-hand cars purchased through finance.
If you bought a car, motorbike, or any other kind of motor vehicle on PCP (Personal Contract Purchase) finance between 2007 and 2021, you could be entitled to make a claim. If your finance agreement included a mis-sold DCA agreement, Friends Legal can help you seek compensation.
This investigation by the FCA into mis-sold car finance is still ongoing, with the scope of claims increasing rapidly. Fill out our form today to instantly find out if you have a claim.
What is a DCA?
DCAs are commission structures used by dealerships when selling car finance, where dealers set interest rates higher than the rate agreed. The dealership pockets the difference as commission, often without being upfront about this. This can result in consumers paying significantly higher interest rates than they should.
In many cases, consumers were not made aware that the dealership could alter the terms of their loan. This lack of transparency has led to accusations of mis-selling car finance and exploitation. Some consumers have reported paying inflated interest rates, which could run into hundreds or even thousands of pounds over the course of their loan.
When was the DCA Scandal First Uncovered?
The Financial Conduct Authority (FCA), the UK’s financial regulator, has been investigating the practice since January 2024, due to growing concerns over its impact on consumer fairness and its transparency.
The issue is simple: dealerships had been incentivized to charge consumers higher interest rates, even when lower rates would have been available based on their credit profile. The FCA investigation into Discretionary Commission Arrangements is still ongoing, with the scope of mis-sold car finance claims increasing almost daily. Many customers were either unaware that the dealership had the discretion to change the terms of their loan, or they were misled into thinking the rate they were offered was the best available.
DCAs were banned in 2021 due to financial incentives for lenders, but a court of appeal ruling in October 2024 means lenders could be forced to pay back millions to customers to whom car finance was mis-sold.
Which Car Finance Lenders Were Mis-Selling?
The FCA found that 40% of car finance agreements included DCAs, allowing car dealers to gain commission, and increase interest rates on your car finance loan without letting you know. In some cases, car finance has been mis-sold altogether.
Almost all lenders have used DCAs in finance agreements, including:
- Black Horse
- Santander
- Volkswagen Financial Services
- Barclays Partner Finance
- BMW Financial Services
- Mercedez-Benz Financial Services
- Motonovo
- Mobilize
The largest of these vendors have already set aside millions to compensate customers who were mis-sold car finance agreements:
| Black Horse | £450 Million |
| Santander | £295 Million |
| BMW | £70 Million |
If you believe you’ve been affected by DCAs, now is the time to act. The high court recently ruled in favour of the Financial Ombudsman Service, and the FCA has extended the time lenders need to settle until December 2025. The volume of these claims is growing in scope because of the investigation, however, millions of pounds have already been set aside to compensate consumers.
Consumer rights advocate Martin Lewis, founder of MoneySavingExpert, has been a strong voice in highlighting the unfairness of these practices. He has encouraged consumers who feel they may have been mis-sold car finance to take action and explore their options for compensation.
Why Should You Make a Claim for Mis-Sold Car Finance?
The consequences of mis-sold car finance can be severe, leading to higher levels of debt and financial instability. At Friends Legal, we are committed to helping consumers who have been misled or charged excessive interest due to DCAs. If you feel like you’ve been mis-sold car finance, or feel like the lender was unclear on their commission, you might have a claim.
You can still make a claim if your car was paid off, if your finance arrangement included a Personal Contract Purchase (PCP), or Hire Purchase (HP), and even if you had your vehicle repossessed. If you have a finance agreement for multiple vehicles, you can claim these simultaneously.
The average claim could net around £1,600, but this can vary. You don’t need a lawyer to make a claim, but by choosing Friends Legal to claim on your behalf, we can help make the process as easy and stress-free as possible, and we may be able to help maximise the compensation you rightly deserve.
Why use Friends Legal for Your Mis-Sold Car Finance Claim?
It’s normal to feel stressed or upset when you feel like you’ve been paying more than you should have, and we know the financial strain this can cause. At Friends Legal, we know that navigating these types of claims can be complex, and our friendly team of lawyers are here to make the process as simple and stress-free as we can. We are dedicated to fighting for each of our clients to get them the compensation they deserve and operate on a No Win, No Fee basis.
If you feel like you weren’t fully aware of your finance agreement terms or were misled by your car dealer, our team of experts can review and explain your agreement and determine if you’re eligible to make a claim. At Friends Legal, we want to help.
We can assist you in:
Reviewing your car finance agreement to determine if you were mis-sold or charged an inflated interest rate.
Helping you understand your legal rights and whether you are eligible for compensation.
Claiming compensation on your behalf for any overpaid interest.
Offering expert advice on how to proceed if you have already settled or are in the process of paying off your car finance.
Our team of solicitors are experts in managing complex compensation claims, with years of experience fighting to get our clients the maximum personal injury compensation they’re owed, while making the process simple and straightforward. As one of the fastest-growing legal firms in Scotland, we deal with thousands of claims a year, treating each one with the care and consideration they deserve. Friends Legal are working in partnership with Benson Goldstein Solicitors, who are experts in claiming for mis-sold motor finance. Your retainer agreement with be with BGS.
As the legal landscape around mis-sold car finance is evolving, we communicate regularly and clearly the developments, and how they effect you. We do this to ensure that the time we spend supporting you in your claim is as stress-free as possible, and you know exactly where you stand.
No Win, No Fee Car Finance Mis-Selling Claims
If you were mis-sold finance, you will rightly feel like you deserve justice, but wouldn’t want to be out of pocket if your claim was unsuccessful. Friends Legal we’ll use our expertise to help maximize your compensation, and our team of solicitors operates on a no-win, no-fee basis, meaning if your claim is unsuccessful you won’t be charged. You do not need a solicitor to submit a claim, and If we don’t think you have a claim, we’ll let you know.
Submitting Your Car Finance Mis-Selling Claim is Easy with Friends Legal.
We want to make every step of the mis-sold car finance claims process as easy as possible for you.
Check if You Have a Car Finance Claim in No Time at All!
Check if you have a potentially eligible agreement as quickly as you can type in your details. The process is really simple:
1
Provide your details, and we’ll perform a quick check.
2
If you have a claim, submit it, and we’ll do the rest.
3
You get paid compensation for being mis-sold.
1 – By providing some basic details about yourself, we will instantly check whether you have an eligible credit agreement. We’ll also look for multiple agreements. We can look for your loan agreements even if you don’t remember the details, such as your registration number. In order to do so, a “soft” credit check footprint will be left on your file. However, it will not impact your credit score. So even if you’re not sure you had a car loan agreement, we can quickly check for you without it affecting your credit report.
2 – If there is a potentially mis-sold car finance agreement(s) found, simply sign and leave your email address to register your claim in our portal. If, after further investigation, your claim doesn’t have merit, we will inform you why, and you will not be charged – our no win, no fee guarantee. If you have agreements as far back as 2007, we will be able to look for these once your information is on our system. We’ll let you know if we find any.
3 – If there is a genuine claim, we will manage evey aspect of the process until you receive your compensation. This will include sending a letter of claim to the lender on your behalf, and securing the funds to pay into your accounts.
Submit a claim now by filling in our short form, and find out how much you could be owed.
The scope of this scandal and the FCA Investigation is growing day by day, and an increasing amount of people are eligible to make a claim. By submitting your details on our form we can quickly and easily determine if you qualify for compensation, and approach dealerships and lenders on your behalf, making the process as simple as possible for our clients.
Don’t delay, find out if you have a claim now!