The car finance mis-selling scandal is one of the biggest financial compensation cases in UK history. Millions of drivers were unknowingly paying inflated interest rates because lenders and car dealers stacked hidden commission payments onto finance agreements.
In a ITV News investigation, Sentinel Legal’s Sam Ward exposes:
How car dealers were trained to push customers into higher interest finance deals to increase commissions.
Why 99% of the 31.7 million motor finance agreements since 2007 included undisclosed commissions, according to the FCA.
How Santander paid £14.96 million in "advanced commissions" to lock customers into expensive finance deals.
Why millions of car finance compensation claims are currently on hold awaiting a Supreme Court ruling.
How Sentinel Legal helped Kyle, a real customer, win back compensation for his mis-sold car finance deal.
If you bought a car on finance between 2007 and 2021, you could be owed thousands in compensation.
ITV News investigates Car Finance Mis-Selling with Sentinel Legal
Watch the full ITV news investigation into the mis-selling of car finance with Sentinel Legal below.
The Evidence: How the Car Finance Industry Rigged the System Against Consumers
The FCA has confirmed that 99% of car finance agreements since 2007 involved a commission payment. However, these commissions were not disclosed to consumers, meaning buyers had no idea they were paying extra interest to fund dealer profits.
🔎 Related Article: How Lenders Manipulated Car Finance Commissions
Key Findings from the ITV News Investigation
Lenders structured their finance deals to ensure maximum commissions for dealers, even when this meant higher borrowing costs for consumers.
Consumers were not given the option to negotiate or even see what commission was being paid.
The lenders and brokers worked together to push higher-interest loans while pretending to offer competitive financing.
This isn’t a small issue - it’s a multi-billion-pound scandal.
Kyle’s Story – Sentinel Legal Recovers Compensation for a Mis-Sold Car Finance Client
Kyle is just one of the many Sentinel Legal clients who have received compensation after discovering they were mis-sold car finance.
Kyle financed his car through a PCP agreement, unaware that a large portion of his payments was going toward undisclosed commissions.
Sentinel Legal investigated his agreement and uncovered hidden commissions that had inflated his interest rate.
We fought for Kyle’s compensation, and he successfully received a payout for the unfair charges he had paid.
"I had no idea I was being charged extra just to fund dealer commissions. Sentinel Legal handled everything and got me the compensation I deserved!" – Kyle
If you, like Kyle, took out car finance without being told about commission payments, you could be owed thousands.
Santander’s Advanced Commissions Scheme: A £14.96 Million Scandal
One of the most shocking findings relates to Santander’s “advanced commissions” model, which was used to lock dealers into pushing Santander finance deals over other options.
Santander paid £14.96 million in upfront commissions to a dealer network, tied to a £75 million loan commitment.
This created a clear conflict of interest—dealers were financially motivated to push Santander’s finance over other, potentially cheaper options.
Consumers had no idea this was happening—they thought they were getting a competitive finance deal when in reality, they were paying inflated interest rates to fund these dealer kickbacks.
🔗 Read more about Santander’s hidden commission practices here.
The Supreme Court Battle: Will Lenders Be Forced to Pay Compensation?
The Supreme Court is set to rule in April 2025 on whether lenders must repay billions in compensation to affected consumers.
The Treasury attempted to intervene in the case, arguing that forcing lenders to pay compensation would destabilise the banking sector. However, the Supreme Court rejected this intervention, signalling that the ruling will be based on legal merit, not economic concerns.
If the Supreme Court rules in favour of consumers, lenders will have no choice but to return billions of pounds in hidden commissions.
If you had car finance since 2007, now is the time to act. Do not wait for the Supreme Court ruling to limit compensation payouts.
Start Your Car Finance Claim Now - Click Here
How Much Compensation Could You Receive?
The total amount set aside by lenders for redress currently stands at £1.7 billion.
However, with 31.7 million affected agreements, that equates to just £54.18 per agreement.
Many consumers unknowingly paid thousands in hidden commissions, meaning the current provisions are far too low.
Sentinel Legal’s investigations show that some customers paid over £16,000 in hidden commissions on a single car finance deal. The real compensation figures will be much higher than the £1.7 billion lenders have set aside.
What Happens Next? The Future of Car Finance Compensation
The FCA has announced a proposed industry-wide redress scheme, but concerns remain that it will favour lenders over consumers.
If the Supreme Court ruling favours consumers, banks may be forced to increase their provisions significantly.
More legal action may be needed to ensure consumers receive full compensation rather than reduced settlements.
The key takeaway - if you think you were mis-sold, act now. Waiting could result in additional delays.
FAQ – Answering Your Most Common Questions about car finance claims
What is the FCA's car finance redress scheme, and how does it affect me?
The FCA is considering, (Nothing official or announced) an industry wide redress scheme for mis-sold car finance agreements. If approved, this could allow consumers to claim compensation without taking legal action.
How do I check if I was mis-sold car finance?
If you bought a car using PCP or HP finance, you can check your agreement for hidden commissions or inflated interest rates. Sentinel Legal can investigate for you.
How much compensation could I get for a mis-sold PCP or HP finance deal?
Compensation amounts vary, but some customers have received payouts of over £10,000.
What happens if the Supreme Court rules against lenders?
If the Supreme Court upholds the ruling against lenders, they will be forced to pay back billions in hidden commissions. This could lead to mass compensation payouts similar to the PPI scandal.
What should I do if I want to claim compensation?
The best course of action is to start your claim now, before lenders attempt to limit payouts. Sentinel Legal is actively handling thousands of cases and can assess your eligibility.
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