Thousands of drivers rush to complain over 'unlawful' practice

James Rodger
·2-min read
Thousands of drivers rush to complain over 'unlawful' practice
-Credit: (Image: Reach Publishing Services Limited)


Car finance complaints are soaring - as 'unlawful' fraud and scam cases spiral. Car complaints jumped by more than 50 per cent to 11,817 in the second quarter of the year compared to 4,622 for the same period last year, new research has revealed.

The complaints were in response to discretionary commission agreements (DCA) applied to car finance prices which were not made public to the customers. Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, said: “It’s concerning to see yet another rise in fraud and scam cases coming to our service.

“People can feel embarrassed to have fallen victim to a fraud or scam and may be reluctant to report the issue, but these crimes can be complex and incredibly convincing, and nobody should be afraid to come forward. In recent years, as a result of our investigations into thousands of cases, more than £150million has been returned to those who have fallen victim to a scam."

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The rise in the number of complaints comes after a Court of Appeal ruled in favour of customers and stated that it was “unlawful” for car finance firms to have obscured the commission agreements. Nikhil Rathi, chief executive of the FCA explained: “The Court of Appeal’s ruling means many customers who bought a car using finance through a dealer could be owed compensation.

“We want to make sure that consumers who are owed money get it in an orderly way, and that the motor finance market continues to provide competitive deals for the millions of people that rely on it.” Martin Lewis, the BBC, ITV star and founder of Money Saving Expert, has previously warned that the car finance issue could reach a "PPI scale of payouts" with the floodgates open now for more people than before given a chance to complain.

The FCA noted that if the extended time frame goes ahead, firms will need to use the additional time to ensure they have the “resources to investigate and issue final responses to complaints at the end of the proposed extension”.

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