PCP CLAIM
PCP CLAIMS
Many UK motorists who purchased a vehicle using a Personal Contract Purchase (PCP) finance agreement between 2007 and 2021 may be entitled to claim compensation due to mis-selling practices. This situation has been investigated by the Financial Conduct Authority (FCA), which banned the use of Discretionary Commission Arrangements (DCAs) in January 2021.
What is a PCP claim?
A PCP claim is a compensation claim for a mis-sold PCP finance agreement. This means that the agreement may have been sold unfairly, potentially costing the consumer more than they should have paid
How were PCP agreements mis-sold?
Common mis-selling practices included:
- Undisclosed commissions: Dealers or brokers earned commissions from lenders, sometimes tied to the interest rate, creating an incentive for higher charges.
- Inadequate explanation of terms: Important contract details like balloon payments, mileage limits, and fees were not always clearly explained.
- No discussion of alternatives: Other finance options may not have been presented.
- Pressure to sign: Some customers felt rushed or pressured into signing.
- Lack of affordability checks: Lenders did not always sufficiently check if customers could afford the repayments.
Who is eligible for a PCP claim?
You may be eligible if you had a PCP or HP agreement between 2007 and 2021 for personal use. Key indicators of potential mis-selling include being unaware of dealer commissions, not receiving enough information, feeling pressured, or having a higher interest rate than expected.
What can be claimed for?
Successful claims can result in refunds of overpaid interest or fees, adjustments to loan terms, or even contract termination in severe cases. While compensation varies, the FCA estimates an average overpayment of £1,100 on a £10,000, four-year deal with hidden commissions. Some claims have seen payouts of £10,000 or more.
Making a claim
- Gather Documentation: Collect relevant paperwork like your finance agreement and payment records.
- Assess the Agreement: Review your agreement for signs of mis-selling, potentially using a claims checker or specialist.
- Submit a Complaint: Contact your finance provider, explaining why you believe the agreement was mis-sold. They must investigate, though the FCA has extended their response time for DCA-related complaints until December 4, 2025.
- Escalate if Necessary: If dissatisfied with the provider’s response, you can refer the case to the Financial Ombudsman Service (FOS).
Important notes
- You can still submit a complaint while the FCA investigation and court cases are ongoing.
- There is a time limit for claims: typically six years from the agreement date or three years from when you became aware of mis-selling.
- While Claims Management Companies (CMCs) can assist, you can complain directly to the lender and escalate to the FOS for free. Understand any fees if you use a CMC.
Civic Relief offers free assistance to check eligibility and guide you through the process.
What constitutes mis-selling?
You may have been mis-sold a PCP agreement if:
- Undisclosed Commission: The dealership or salesperson received a commission from the lender that wasn’t fully disclosed to you.
- Misleading Information: You were given incorrect or insufficient information about the finance agreement’s terms, such as the total cost, interest rates, or fees.
- Unsuitable Terms: The agreement was not suitable for your financial situation, or the monthly payments were unaffordable.
- Lack of Alternatives: The salesperson failed to inform you of all available finance options, according to Bott and Co Solicitors.
- Pressure to Sign: You felt pressured or rushed into signing the agreement without fully understanding it.
- Inadequate Affordability Checks: The lender did not conduct proper checks to ensure you could afford the repayments.
How can Civic Relief help you?
Civic Relief simplifies the claims process for mis-sold PCP agreements. It is not required to use a claims management company to make a complaint, complaints can be made for free by contacting the lender directly. If a complaint is unsuccessful, it can be referred to the Financial Ombudsman Service.
- Free Eligibility Check: Determine if a valid claim exists using the easy-to-use online checker.
- Expert Guidance: A dedicated team understands consumer finance claims.
- Comprehensive Support: Guidance is offered through each step, from gathering documentation to submitting a complaint to the lender and escalating to the Financial Ombudsman Service if needed.
- No Win, No Fee: Many claims are handled on a “No Win, No Fee” basis, meaning payment is only required if the claim is successful.
- Maximize Compensation: The goal is to help recover overpaid interest, hidden commissions, and other losses due to mis-selling. The FCA estimates the average overpayment on a £10,000, four-year deal with hidden commission is £1,100.
Start your free claim check today
Don’t miss out on the compensation you may be entitled to. The FCA is currently investigating this issue and a potential industry-wide redress scheme is being considered. The FCA has extended the deadline for firms to respond to complaints until after December 4, 2025; it’s wise to act now to get a claim in the queue.