Car finance commission, explained on a real agreement

Good afternoon. I am TILL. I am a receipt printer, which means I am not a lawyer and nothing I say is advice. What I am good at is asking the questions people actually send us, and printing the answers.

Everything legal in the next forty minutes comes from Priya Anand, who is a solicitor at Hartwell Redress LLP and can be looked up on the SRA register. Priya, thank you for coming.

Happy to be here. And can I say at the start — we are not going to tell anyone today whether they have a claim. We cannot, and anyone who does that from a webinar is not being straight with you.

Noted and printed. So what are we doing instead?

Explaining the mechanism. If you understand how the commission worked, you can look at your own paperwork and form a view. That is far more useful than me guessing about a case I have not seen.

On screen now is a real agreement, redacted. Priya, walk us through it.

So this is a personal contract purchase from 2016. The bit everyone looks at is the monthly payment, here. The bit that matters for a commission claim is over here — the interest rate.

What you are not told anywhere on this document is that the dealer had discretion to set that rate. The higher he set it, the more commission he received from the lender. That is the whole issue in one sentence.

So the number was negotiable and the customer did not know that.

Correct. And crucially the customer was not told the dealer had a financial interest in the number being higher. That is the non-disclosure. It is not that the rate was high — plenty of people paid a fair rate. It is that the arrangement was not explained.

Now look at the small print on page four. You will see a line about the broker possibly receiving a commission. That wording is doing a lot of work, and whether it was sufficient is precisely what the courts have been asked to decide.

If someone cannot find their agreement?

A data subject access request to the lender. It is free, they have a month to respond, and they must give you what they hold. We have a page explaining how to word one.

Question we get more than any other: was I in the right years?

Broadly, agreements from around 2007 up to January 2021, when the discretionary commission model was banned. But please do not treat those dates as a test you pass or fail. Some arrangements outside them still involved undisclosed commission.

Both PCP and hire purchase, and it does not matter whether the car was new or used. What matters is that it was financed, and that a broker or dealer sat between you and the lender.

What about someone who has already sold the car, or finished paying?

Still in scope. The claim is about what you were charged, not about whether you still own the vehicle.

The FCA review. In plain terms, what has changed?

The regulator has been looking at whether a formal redress scheme is the right route, rather than millions of individual complaints. If that happens it would mean a standardised process, which is generally quicker and cheaper for consumers.

What it does not mean is a guaranteed payment, or a figure. I have seen numbers circulating and I would not stand behind any of them.

Does someone need to do anything now, or wait?

Getting your paperwork together now costs nothing and puts you in a better position either way. That is the most I would say.

Questions from the audience. These came in anonymously. First: my dealership has closed down — does that end it?

No. The claim is generally against the lender, not the dealership, and lenders are still very much in business.

Next: I was told I have to use a particular claims company or I lose out. Is that true?

That is not true, and I would treat whoever told you that with real caution. You can complain to the lender yourself for nothing.

Next: how long will this take? I will attempt this one myself. The honest answer is that I do not know, and neither does anyone else. Priya, correct me.

You are right, and I will not improve on it. Cases like this run in years, not months. Anyone giving you a date is guessing.

Last one: how much do you charge? Nothing. There is no charge to a consumer anywhere on our site, and we do not take anything from a settlement. Law firms pay us. I print that on every receipt.

Three things. Find your agreement, or request it. Read the interest rate and the commission wording. Then decide, in your own time, whether to take it further.

And what not to do — do not pay an up-front fee to anybody for this. Not a solicitor, not a claims company, not us. There is no legitimate reason to charge you before anything has been recovered.

Thank you Priya. The transcript of this session is published in full below, and nothing in it is gated. I am going to stop printing now.