Did you have a Honda 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.
Claim NowHeadquartered in Tokyo, Japan, the Honda brand is synonymous with reliability and practicality around the world. According to the brand’s Honda news site, Honda has already had some notable achievements, milestones and statistics so far this year, including:
Honda Civic Type R Wins UK Car of the Year ‘Performance Car’ Category
Honda will Premiere New EV Series for Global Markets at CES 2024
GM-Honda Begin Commercial Production at Industry’s First Hydrogen Fuel Cell System Manufacturing Joint Venture
The Financial Conduct Authority announced this January that they will be investigating PCP and HP agreements to determine whether hidden commission payments were being made to brokers. The FCA’s investigation has the potential to allow millions of car finance customers to claim compensation from their lender/broker. The FCA will be seeking 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.
If you are wondering whether or not you may have a claim against Ford in the not too distant future with regard to your car finance deal then keep reading. Firstly, t’s important to recognise The FCA’s investigation will only cover car finance sales that meet certain criteria. 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 utilised a personal contract purchase 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.
You will not be able to make a complaint If you bought a car on finance after the deadline or without PCP or Hire Purchase agreement. If you did purchase your car with the aid of car finance but it was on or after the 28th of January 2021 deadline, you will not be eligible for compensation. Secondly, a personal contract hire agreement complaint in which the car was leased will not be included. If you do not fit the hidden commission criteria, you may still have a car finance unaffordablity claims if you can provided evidence that necessary background checks were not carried out by the lender or dealership who offered you the loan.
For the next eight months firms have been asked to stop responding to complaints by the FCA. The exact 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 lodge 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.
It has been unveiled that lenders tend to conceal the existence of commission 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.
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.
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.’
Not even the FCA currently knows the amount of financial compensation that may be available to car finance customers in the future. In fact, 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”.
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
