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Contacted regarding missold PCP

I was recently contacted by an agency regarding the likely mis-selling of a past PCP agreement I had

I was advised that given a recent report from the FCA, finance companies are liable to giving compensation to customers to whom they gave very high interest rates and APRs to, which supplemented their commission unbeknownst to the customer - and this was a form of mis-selling apparently

I was also sent this link, it's a pdf of the FCA's summary
https://www.fca.org.uk/publication/multi-firm-reviews/our-work-on-motor-finance-final-findings.pdf

My questions are, is there any substance to these types of claims? Does anyone have any personal experience from pursuing this? Or is it not worth wasting any time on?

NB - In hindsight I did not do enough of my homework when I took out a PCP with a 9% APR and a 9% interest rate, and was going to chalk it up to 'you live and you learn' because I was quite young and impressionable at the time, but if there is an opportunity to claim some of the money back I don't see why it shouldn't be explored

PS. - Please be kind! They're simple questions, I'm just relaying what I was told and sarcastic/mean replies won't be appreciated
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Comments

  • Sandtree
    Sandtree Posts: 10,628 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    The real question is, if you feel you were duped why would you use an agency and give away part of your dues rather than log a complaint and escalate to the Financial Ombudsman and therefore keep all your award (if there is any).

    The question is really what evidence you have that they inflated the APR to get higher commission?
  • Penguin_
    Penguin_ Posts: 1,389 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    Is this the new PPI then?
  • Sandtree said:
    The real question is, if you feel you were duped why would you use an agency and give away part of your dues rather than log a complaint and escalate to the Financial Ombudsman and therefore keep all your award (if there is any).

    The question is really what evidence you have that they inflated the APR to get higher commission?
    I'm information gathering at the moment, so have not considered which avenue to use, hence my question of is this sort of claim is even worth pursuing

    In terms of evidence, hence my other question of whether someone else has gone down this route already, therefore I'd get an idea of what documentation to look for
  • Sandtree
    Sandtree Posts: 10,628 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    Penguin_ said:
    Is this the new PPI then?
    Package bank accounts was supposed to be but that ended up being a bit of a damp squib... then there was affordability checks on payday loans but that was a limited customer base... I knew a chap who was going round putting monies into certain  with profit investment funds which he thought would be a future big scandal but he never fully explained what he thought the issue was and he's the one casualty of Covid I know and so he never got to fight for his payout.
  • Grumpy_chap
    Grumpy_chap Posts: 16,535 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Combo Breaker
    Purpleee said:
    I was recently contacted by an agency regarding the likely mis-selling of a past PCP agreement I had

    I was advised that given a recent report from the FCA, finance companies are liable to giving compensation to customers to whom they gave very high interest rates and APRs to, which supplemented their commission unbeknownst to the customer - and this was a form of mis-selling apparently

    I was also sent this link, it's a pdf of the FCA's summary
    https://www.fca.org.uk/publication/multi-firm-reviews/our-work-on-motor-finance-final-findings.pdf

    My questions are, is there any substance to these types of claims? Does anyone have any personal experience from pursuing this? Or is it not worth wasting any time on?

    NB - In hindsight I did not do enough of my homework when I took out a PCP with a 9% APR and a 9% interest rate, and was going to chalk it up to 'you live and you learn' because I was quite young and impressionable at the time, but if there is an opportunity to claim some of the money back I don't see why it shouldn't be explored

    PS. - Please be kind! They're simple questions, I'm just relaying what I was told and sarcastic/mean replies won't be appreciated
    It is quite possible that the people who called you had only purchased a list of names and numbers and had no idea whether you ever had PCP or not.  In your case, they got lucky.

    IF you were mis-sold what loss have you suffered that you would claim compensation for?  It may possible to have been mis-sold on a technicality but still not have suffered a loss and therefore no claim arises.

    To asses that, it may be worth considering what interest rate you could have obtained elsewhere at the time of application, given full consideration of your credit file, income, outgoings.  Important to consider the rates you could have actually achieved and not simply headline advertised rates.

    Was this a used car?  Used car finance is often higher rate interest than brand new cars.
    Although 9% is not "keen", it is not necessarily "extortionate" either.

    After considering the above, do you still think you have grounds for a claim?

    I can't advise anyone with personal experience, but there is a linked thread earlier today:
    https://forums.moneysavingexpert.com/discussion/6298216/pcp-claims#latest

    Hope that helps.
  • It is quite possible that the people who called you had only purchased a list of names and numbers and had no idea whether you ever had PCP or not.  In your case, they got lucky.

    IF you were mis-sold what loss have you suffered that you would claim compensation for?  It may possible to have been mis-sold on a technicality but still not have suffered a loss and therefore no claim arises.

    To asses that, it may be worth considering what interest rate you could have obtained elsewhere at the time of application, given full consideration of your credit file, income, outgoings.  Important to consider the rates you could have actually achieved and not simply headline advertised rates.

    Was this a used car?  Used car finance is often higher rate interest than brand new cars.
    Although 9% is not "keen", it is not necessarily "extortionate" either.

    After considering the above, do you still think you have grounds for a claim?

    I can't advise anyone with personal experience, but there is a linked thread earlier today:
    https://forums.moneysavingexpert.com/discussion/6298216/pcp-claims#latest

    Hope that helps.
    I submitted my number after I saw a Facebook ad about missold Audi PCPs, and then received a phone call, sorry for the confusion

    In terms of determining whether I suffered any losses, again, hearing from someone who has gone down this route would be beneficial because at this moment I wouldn't know how to demonstrate losses

    This was my first ever car, and it was a brand new car

    Thank you for the link, might drop a few people a message

    If the agency is infact truly 'no win no fee', and their fee is up to 35%, I would be of the opinion that 65% of something large is better than 100% of something small or nothing
  • BOWFER
    BOWFER Posts: 1,516 Forumite
    1,000 Posts Second Anniversary Name Dropper
    I thought the crux of the matter was that people were mis-sold payment protection insurance on their PCP?
    Not that they felt the PCP was a problem in itself.
    Why would it be?
  • Grumpy_chap
    Grumpy_chap Posts: 16,535 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Combo Breaker
    Purpleee said:
    In terms of determining whether I suffered any losses, again, hearing from someone who has gone down this route would be beneficial because at this moment I wouldn't know how to demonstrate losses

    This was my first ever car, and it was a brand new car
    What you suffered as losses would be how that PCP finance rate compared to what you could have obtained generally.

    Interest rate at 9% seems high on a brand new car PCP - what was the headline advertised rate on the Audi website when you purchased the car?  I note, though, the Audi website does seem to have "higher end" PCP finance rates when I looked today.

    At most, your "losses" would be the difference between the rate you obtained for finance and the headline rate offered on the Audi website.  You could use a generic online loan affordability calculator to work out this difference.

    On the subject of losses, is this finance plan now fully closed, or are you still making payments?  If the latter and you can make over-payments or fully redeem the finance you will reduce the on-going impact of the higher interest rate.

    Purpleee said:
    If the agency is infact truly 'no win no fee', 
    You would need to read the details of their proposal before signing to establish whether they are truly "no-win-no-fee". 
    Consider any costs or insurances required before commencing the process.
    Consider what happens if the whole process become clearly pointless, but you find you are still tied in and subject to costs if you withdraw.  This could have uneccessary burdens on your time if nothing else.

    Purpleee said:
    I would be of the opinion that 65% of something large is better than 100% of something small or nothing
    Obviously, but you might end up with 65% of something small or nothing.  
    Worst case, if they are not truly "no-win-no-fee", then there may be a cost incurred leaving you in a negative position.  I don't say that will happen, but it is an outcome that should be considered.
  • Grumpy_chap
    Grumpy_chap Posts: 16,535 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Combo Breaker
    BOWFER said:
    I thought the crux of the matter was that people were mis-sold payment protection insurance on their PCP?
    Not that they felt the PCP was a problem in itself.
    Why would it be?
    Looking at the report linked by the OP, this issue is far from simple:
    Purpleee said:
    I was advised that given a recent report from the FCA, finance companies are liable to giving compensation to customers to whom they gave very high interest rates and APRs to, which supplemented their commission unbeknownst to the customer - and this was a form of mis-selling apparently

    I was also sent this link, it's a pdf of the FCA's summary
    https://www.fca.org.uk/publication/multi-firm-reviews/our-work-on-motor-finance-final-findings.pdf

    It seems to be that some car Dealers were paid commission linked to the interest rate they sold the finance at, so higher interest rate earned more commission.  All that *should* be impacting the interest rate is the credit-worthiness of the individual, but this is skewed if the Dealer manages to sell the higher interest rate to an individual that could get a more favourable rate.

    I am not sure to what extent this is an issue with brand new cars supplied through official dealer networks as the interest rates are openly advertised and, so far as I understood, do not really vary as they are backed by the manufacturer who takes a risk profile on the normal customer pool.
  • born_again
    born_again Posts: 17,424 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    Purpleee said:
    I was recently contacted by an agency regarding the likely mis-selling of a past PCP agreement I had

    I was advised that given a recent report from the FCA, finance companies are liable to giving compensation to customers to whom they gave very high interest rates and APRs to, which supplemented their commission unbeknownst to the customer - and this was a form of mis-selling apparently

    I was also sent this link, it's a pdf of the FCA's summary
    https://www.fca.org.uk/publication/multi-firm-reviews/our-work-on-motor-finance-final-findings.pdf

    My questions are, is there any substance to these types of claims? Does anyone have any personal experience from pursuing this? Or is it not worth wasting any time on?

    NB - In hindsight I did not do enough of my homework when I took out a PCP with a 9% APR and a 9% interest rate, and was going to chalk it up to 'you live and you learn' because I was quite young and impressionable at the time, but if there is an opportunity to claim some of the money back I don't see why it shouldn't be explored

    PS. - Please be kind! They're simple questions, I'm just relaying what I was told and sarcastic/mean replies won't be appreciated
    The answer is if you were miss sold.

    DO NOT use a 3rd party. Do it yourself & pocket 100% of any compensation. 
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