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Ford PCP Claims

Did you have a Ford car finance agreement before January 28th 2021? If so you may be able to claim compensation in light of a new FCA announcement concerning hidden commissions.

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A background on Ford

Founded in 1903, the formerly known Ford Motor Company, was the brainchild of Henry Ford. The brand’s headquarters reside within Michigan, and Ford is an undeniable giant within the automotive industry. To this day, Ford remains one of the world’s largest family owned company’s behind other hugely successful brand’s such as Walmart and Roche.

In fact, Henry Ford’s great grandson, William Clay Ford, Jr is currently the company’s executive chairman. Having built cars for over a century, the brand’s most popular models to date in top three order are the Ford F-150, Fiest and Escort.

What are Ford PCP claims?

Just over two months ago in January 2024, The Financial Conduct Authority announced that they will be conducting an investigation into PCP and HP agreements to determine whether hidden commission payments were secretly being made to and pocketed by brokers. The news made headlines due to the potential scale of such an investigation. For example, The FCA’s enquiry has the potential to allow millions of car finance customers to claim compensation from their lender/broker. The purpose of the investigation will be to determine whether or not discretionary commissions were made by brokers who were financially incentivised by brands to offer higher interest rates.

The Financial Conduct Authority’s decision to investigate has been the result of customer complaints concerning motor finance firms potentially unfairly rejecting mis-selling claims. Such complaints from customers are centred around the belief that their contract was more costly due to their dealer/broker earning a significant secret commission from their policy.

Who has a Ford PCP claim?

If you are wondering whether or not you may have a PCP claim against Ford once the investigation has been conducted, there are a few key things to consider. Firstly, in keeping with the deadline that prohibited hidden commissions, complaints need to be made only for car finance agreements sold before the 28th of January 2021.

In addition to preceding the deadline the car sale must have been a either a PCP or a hire purchase offering. Unlike a PCP agreement, a hire purchase agreement means the customer pays the value of the car in specific monthly instalments.

How to claim Ford PCP compensation

In order to allow time for lenders to pause current communications surrounding claims during this period of uncertainty, for the next six months firms have been asked to stop responding to complaints by the FCA. This pause period began after 17th November 2023 and will end on the 25th September 2024 to allow the whilst FCA to conduct their investiagtion. Whilst the investigation is underway, it is a good idea to submit any complaints to the firm as soon as you can as there is often a limitation period to be observed. With regards to misselliing, you are generally required to make your complaint to your provider within six years of the issue, or within three years of you becoming aware of the problem.

We can help you get kickstart your complaint in order to see if you may be eligible for a payout, click here to get going.

Ford Secret Hidden Commisions

Evidence has to come to light that unveiled lenders may have concealed commissions offered to their brokers. A mystery shopping exercise carried out back in 2018 reviewed the processes followed by 122 retailers in their provision of Motor Finance. Of those 122 retailers, only 11 chose to disclose to the customer that commission may be received by the broker for arranging the finance. This violates CONC requirements as it creates an unfair relationship between customer and lender.

Ford Difference In Commisions

It has been found that lenders often incentivise a broker to charge a higher interest by compensating them with a commission proportional to the interest the sell. The estimated cost of this behaviour for the customers is £300m annually. An FCA consultation entitled : ‘Motor Finance discretionary commission models and consumer credit commission disclosure,’ found that Difference in Charge models are the most damaging to the customer which unnervingly consist of 95% of the 1000 agreements the FCA looked into.

Ford Inadequately Explained Contracts

The mystery shopper exercise mentioned earlier which was carried out by the FCA also wanted to investigate whether or not lenders fully disclosed all the necessary information regarding the Motor Finance agreements to be made. The shoppers found that the concept of ownership of a car under PCP was frequently brushed over or poorly explained. 69% of the mystery shoppers were not made aware by the broker that they would not fully own the vehicle until they had payed the final ‘balloon payment.’

How much is a Ford PCP claim worth?

Nobody knows how much a Ford PCP claim may be worth in customer compensation. Currently, not even the FCA currently knows the amount of financial compensation that may be available to Ford PCP clients in the future. So far, The FCA has simply stated that it will “identify how best to make sure people who are owed compensation receive an appropriate settlement in an orderly, consistent and efficient way”.

Examples Of PCP Misselling

A list of real-life scenarios to demonstrate how you may have

been mis-sold a car on finance:

PCP wasn't the best option

A PCP car on a finance deal was not the best option; it would have worked out 40% cheaper if the customer had used a hire purchase agreement.
The customer felt that they were pushed into making the wrong decision without complete understanding.

Ownership was unclear

The salesperson did not make it clear who would own the vehicle, whether it be the customer, the finance company, or the car dealership.
PCP interest was overcharged.
The customer did not receive alternative options from the dealership.

Hidden Commisions

The salesperson did not fully explain they would receive a commission on the sale of the car.
The customer was mis sold their mileage estimation; the mileage was estimated at 9,000 per year when the dealer knew the customer exceeded this substantially.

Responsibility for repairs

The customer was not advised who would be responsible for repairs.
The vehicle broke down 6 months into the PCP finance agreement.
The car dealership would not pay for any repairs and left the customer with a large bill.

Insufficient background checks

PCP payments were unrealistic, no finance credit checks were carried out.
The customer was rushed into the finance agreement and assured payments would be affordable.
The salesperson skipped through the car finance agreement (t&c).

Pressure from dealership

The car dealership did not explain the interest properly to the customer.
Mileage was over charged mileage by 5,000 miles.
Customer was not provided with a range of options and felt pressured to take a PCP agreement.
PCP interest was overcharged.

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If you'd like to get your compensation claim in before the FCA investigation is concluded to have it lodged in advance you can do so now