Drivers in Wales have been issued a warning as some woke up to unexpected payments amounting to £3,000. MoneySavingExpert (MSE) provided guidance to people who found themselves in this situation. The Financial Conduct Authority (FCA) is currently investigating whether millions of motorists are entitled to refunds for car finance deals made before January 28, 2021. These deals involved “discretionary commission agreements†that allowed dealerships to set loan interest rates, with a particular focus on personal contract purchase (PCP) agreements. However, the FCA’s decision that was expected by September 25, 2024, has been postponed until May 2025.
Despite the delay in the FCA’s decision, some drivers reported receiving compensation, leading to confusion about whether it was related to the ongoing investigation. MSE clarified that these payments were unrelated to the FCA’s inquiry. Drivers who believe they were mis-sold car finance can file complaints and potentially receive additional compensation. MSE contacted several providers, including Black Horse, Motonovo, and VW Financial Services, confirming that the payments received by some drivers were not linked to the FCA’s investigation.
Furthermore, MSE emphasized that although the FCA does not comment on individual cases, it expects firms to rectify identified problems and inform customers about the reason for offering compensation. Several drivers shared their experiences, such as one individual who received £3,345 in compensation from Motonovo and others who received varying amounts. Should the FCA determine that drivers are entitled to compensation, the principle is simple: the larger the car finance, the greater the potential overcharge, and consequently, the larger the potential refund. Drivers could have paid up to £1,100 more in interest on a typical £10,000 car finance agreement over four years due to “discretionary commission agreements,†according to FCA data.
In conclusion, MSE advises drivers who are unsure about the compensation received to contact their provider directly for clarification. Stay informed with the latest Welsh news by signing up for our newsletter.