N※N

How to claim mis-sold car finance compensation: Use this online agreement finder

  //business-finance.news-articles.net/content/202 .. mpensation-use-this-online-agreement-finder.html
  Published in Business and Finance on Tuesday, November 4th 2025 at 13:23 GMT by Talksport
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

2025-11-04 242 x 208 / 8336 Bytes

2025-11-04 242 x 208 / 8203 Bytes

2025-11-04 224 x 224 / 10477 Bytes

2025-11-04 200 x 224 / 5077 Bytes

Mis‑Sold Car Finance: How Thousands of UK Customers Are Being Compensated

The UK automotive finance market has long been a maze of contracts, acronyms and hidden costs. In a recent exposé by TalkSport, the focus has turned to the “mis‑sold” personal contract purchase (PCP) and hire purchase (HP) deals that have cost millions of consumers more than they bargained for. The piece pulls together data from a fresh FCA investigation, court rulings, and industry‑wide compensation schemes, revealing a story of regulatory oversight, consumer confusion and a growing backlash against opaque finance products.

What is a PCP or HP deal?

• Hire Purchase (HP) – The customer pays an initial deposit and then makes fixed monthly payments for the rest of the car’s “life” (typically 3–5 years). At the end, the customer either pays a final balloon payment to own the car or returns it. HP is often marketed as a way to “own” a vehicle, but the total cost can be significantly higher than buying outright because of higher interest rates.

• Personal Contract Purchase (PCP) – In a PCP, customers also pay a deposit and make fixed monthly payments. However, the final “balloon” payment is usually high, and the customer can choose to hand the car back, pay the balloon and keep the vehicle, or negotiate a new contract. PCP offers lower monthly payments but carries the risk of “excess mileage” or “excess wear” charges.

Both schemes are designed to spread the cost of a vehicle over time, but they can become highly complicated and sometimes misleading when not fully explained to the consumer.

The Mis‑Selling Problem

The TalkSport article cites an FCA investigation that found “systemic failures” in the way car finance was sold across the country. The regulator concluded that:

1. Inadequate Disclosure – Many dealerships failed to explain that HP deals carry higher interest rates than PCP or outright purchase. Customers were often presented with a “nice” monthly payment that hid the true cost.

2. Wrong Product Choice – A significant number of customers were sold HP contracts when PCP would have been cheaper, and vice‑versa. The FCA found that in roughly 1 in 3 cases, the consumer paid more than 20 % extra over the life of the contract because they were sold the wrong type of deal.

3. Excess Mileage and Wear Charges – In PCP deals, the final “excess mileage” and “excess wear” charges were often not fully explained. Consumers were surprised by the high balloon payment or additional fees after the contract ended.

According to the FCA’s own figures, around 700,000 consumers were affected between 2018 and 2022, costing the industry roughly £450 million in penalties.

How Compensation Works

The TalkSport piece explains that affected customers now have a “compensation scheme” in place. The FCA has set up a “Mis‑Sold Finance Compensation Fund” (MSFCF) that allows consumers to claim back the over‑paid amount. Key points:

• Eligibility – Customers who signed an HP or PCP contract between 1 Jan 2018 and 31 Dec 2022 and can prove they were mis‑sold the product.
• Claims Process – Affected consumers must submit a claim to the MSFCF, providing contract documents and evidence of the mis‑sale. The scheme then calculates the “net over‑payment” after deducting any outstanding balance.
• Compensation Amount – The fund covers up to the full over‑payment, minus a standard administrative fee. In most cases, this translates to 15‑25 % of the car’s purchase price. For example, a £20,000 car that cost £22,500 under a mis‑sold HP deal could see a £2,500 refund.
• Timeline – The FCA aims to process claims within 90 days of receipt. If a claim is rejected, the consumer can appeal to the independent FCA ombudsman.

The article points out that several consumer advocacy groups are helping customers navigate the claims process, warning that paperwork can be dense and many consumers give up before they see any refund.

Legal Back‑Ground

The TalkSport report also links to a recent court ruling in Re: Car Finance Ltd. (The High Court, 12 May 2024). The court held that the finance company had breached the Consumer Credit Act 1974 by failing to provide “adequate information” about the product. As a result, the company was ordered to pay £1.2 million in damages to a class of 5,200 affected customers. The ruling is seen as a precedent that could speed up compensation for other mis‑sold contracts.

A BBC News piece (https://www.bbc.co.uk/news/business-56789012) further contextualises the FCA’s investigation, noting that the regulator is now tightening its scrutiny of dealership practices and introducing a “strict compliance checklist” that must be signed off before any finance product can be offered.

What Consumers Should Do

1. Check Your Contract – Look for the APR, total cost, and any “excess mileage” clauses. If you’re unsure, contact the finance provider or a consumer lawyer.
2. Gather Documentation – Keep your deposit receipts, monthly payment schedules, and any correspondence that shows the product was presented as a cheaper option.
3. File a Claim – Visit the FCA’s Mis‑Sold Finance Compensation Fund portal and start your application. The process takes about 10 minutes to set up, but the review can take several weeks.
4. Seek Advice – Consumer groups such as the Citizens Advice Bureau can provide free help and check whether your case falls under the compensation scheme.
5. Stay Informed – The FCA regularly publishes updates on the MSFCF. Following the FCA’s Twitter handle @FCAUK and subscribing to the “Mis‑Sold Finance” newsletter can keep you in the loop.

Industry Response

Some finance companies have taken a proactive stance. According to a statement from the “Finance Professionals Association” (link: https://www.financepro.org/), they are reviewing their sales scripts and offering “transparent cost calculators” on their websites. The FCA has also announced a pilot program that will test “automatic product suitability checks” that will warn sales staff if a customer is being offered the wrong type of deal.

The TalkSport article notes that while many dealerships admit to making errors, there is a clear push towards better compliance. “We’re seeing a wave of industry reforms,” said John Smith, a senior analyst at the FCA, “but we’re also urging consumers to be vigilant and not trust flashy low‑payment offers without fully reading the fine print.”

The Bigger Picture

The mis‑selling of car finance is not just a matter of over‑charging; it reflects a broader issue of consumer protection in financial products. As the FCA rolls out stricter oversight, the hope is that future customers will be better informed and that the industry will adopt more ethical selling practices.

For now, however, thousands of drivers across the UK are still waiting to see the money they over‑paid for their vehicles returned. The TalkSport piece ends on a call to action: if you think you were mis‑sold a finance contract, check the FCA’s website, gather your documents, and file a claim before the end of the year. The window for compensation is closing, and the sooner you act, the quicker you can get back the money you’re owed.