Map lays bare Britain’s car finance scandal as areas with most mis-sold schemes revealed – are YOU owed compensation?
A NEW map reveals the whereabouts of the most mis-sold car finance claims which you could use to find out if you are owed compensation.
Laying bare Britain’s corrupt car finance, a staggering 1.4 million claims are thought to be part of the multi-billion pound scandal.
The new data has put a spotlight on specific areas with victims potentially spread across the nation.
An estimated £13 billion could be owed in compensation payouts with experts fearing this figure could actually double.
Lawyers from Courmacs Legal described the “national scandal” as a situation which the Finance Conduct Authority has “failed to get a grip on”.
The managing director for the consumer claims legal firm revealed the data and explained what the findings meant.
Darren Smith told MailOnline: “Consumers were never told about the secret commissions that inflated their costs and we are in the middle of a cost-of-living crisis where many are already struggling.
“Millions were denied the opportunity to make informed decisions about their finances, and many paid thousands more than necessary.”
Motorists worried that they may be eligible to claim compensation can now opt to find out through any of the number of Claims Management Companies.
So far, Scotland has seen the most claiming back money with nearly 200,000 more people likely to take action, according to Courmacs.
The country holds 18 of the 20 top areas for claimants with the region between Edinburgh and Glasgow seeming to have the highest concentration out of all Brits.
Around 168,137 people in the North West of England have already made their claim, making the area the second highest for total declarations.
Northern Ireland has reportedly had 62,144 people come forward with just over 15,000 more being lodged from Wales.
Greater London ranked seventh on the list while the West Midlands came third.
Meanwhile, the South East was the third biggest area for Brits with 155,387 claimaints.
Sittingbourne and Sheppey, Kent, saw the highest number with 2,642 residents make a claim.
It comes after the Court of Appeal ruling last month where judges declared how dealerships were not properly informing drivers of commission payments often found on finance deals.
What is the FCA investigating and who is eligible for compensation?
By Jacob Jaffa, Motors Reporter
What is being investigated?
The FCA announced in January that it would investigate allegations of “widespread misconduct” related to discretionary commission agreements (DCAs) on car loans.
When you buy a car on finance, you are effectively loaned the value of the car while you pay it off.
These loans have interest payments charged on top of them and are often organised on behalf of lenders by brokers – usually the finance arm of a dealership.
These brokers earn money in the form of commission – a percentage of the interest payments on the loan.
DCAs allowed brokers to, to a certain extent, increase the interest rate on a loan, which in turn increased the amount of commission they received.
The practice was banned by the FCA in 2021.
Who is eligible for compensation?
The FCA estimates that around 40% of car deals may have been affected before 2021.
There are two criteria you must meet to have a chance at receiving compensation.
First, you must be complaining in relation to a finance deal on a motor vehicle (including cars, vans, motorbikes and motorhomes) that was agreed before January 28 2021.
Second, you must have bought the vehicle through a mechanism like Personal Contract Purchase (PCP) or Hire Purchase (HP), which make up the majority of finance deals and mean you own the vehicle at the end of the agreement.
Drivers who leased a car through something like a Personal Contract Hire, where you give the car back at the end of the lease, are not eligible.