Motor Finance Claims
Joseph Stewart-Doyle
Head of Personal Contract Purchase
Joseph Stewart-Doyle, Solicitor, is the Head of our Motor Finance Litigation department. He and his team are dedicated to pursuing finance lenders to reimburse our clients with the hidden charges they are owed.
Joseph’s background includes a multitude of areas in financial mis-selling including complex high value multi-jurisdiction pension litigation and PPI/Plevin. Since starting with McDermott Smith Law in October 2021 he has since built and established our Motor Finance Litigation Department in a very new and highly disputed area of law.
Motor Finance
If you have had car finance in the last 10 years, you may not have known that the car dealership who arranged your finance was secretly paid to do so by the finance company. If this is the case, you may be entitled to a refund of these commissions or even more.
Why are you entitled to claim?
Section 140a of the Consumer Credit Act 1974 allows for the court to find a finance agreement between a finance company and a customer to be unfair where the finance company is in a more advantageous position than that customer when entering the finance agreement.
Regulation states that a customer must be made aware of any commissions or fees being paid by the finance company to a dealer or broker for arranging finance for them. This is so a customer knows that their referral for finance is not impartial or necessarily within the customer’s best interest but instead is incentivised by profit.
It is common that the existence of a payment or a commission by the finance company was not properly disclosed to car finance customers. Customers did not know their finance referral was bought by the finance lender. This puts the finance company in a more advantageous position than the customer.
What levels of disclosure you can claim for?
Check your finance documents. You can claim for the below levels of disclosure.
- ‘Full Secret’ Disclosure – Where your full finance agreement and supporting do not mention of commission at all.
- ‘Half Secret’ or ‘Partial’ Disclosure – Where your finance agreement or supporting documents states that there ‘may’ be a commission paid however there is no confirmation that there will definitely be a commission.
How does it affect you?
It is common that the amount of commission that the dealership or the broker received increased where they were able to negotiate higher APR rates for customers. This means that a dealership may have arranged a finance agreement for you with an inflated APR rate to increase how much they received for their secret payment.
If you were aware of these secret payments and inflated APR rates in the first place, then it is likely you would have thought twice about entering in to your finance agreement. By these payments being kept secret from you, you were never given the opportunity to consider whether you were happy with the arrangement and look for a better deal elsewhere.
This is an unfair relationship and for this, McDermott Smith Law can help you.