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"What Are The Most Common Types Of Unaffordable lending Claims?

Drawing from our extensive experience in processing thousands of mis-sold car finance claims, the prevalent forms of mis-selling include:

  1. Undisclosed or Hidden Commissions: Car finance agreements necessitate the disclosure of all fees and commissions between the lender and the car dealer. Failure to inform the buyer about such commissions is considered undisclosed or hidden, a common issue among our clients who were unaware of the dealership's commission for introducing them to a chosen finance company.

  2. Inflating Interest Rates for Higher Commission: Some salespeople, despite having permission to offer lower interest rates, intentionally proposed finance agreements at higher rates to maximize their commission. This practice, identified and banned by the FCA following an investigation, was a key source of mis-selling.

  3. Failure to Explain All Financing Options: Salespeople are legally obligated to elucidate all available finance options, including differences in cost between PCP and HP agreements, undisclosed finance alternatives, potential end-of-agreement costs, and any hidden extras like insurance, service contracts, or charges for exceeding mileage limits.

  4. Non-Disclosure of Ownership Details at Agreement's End: Mis-selling may have occurred if the salesperson failed to clarify the buyer's position at the agreement's end, such as ownership status or the possibility of a final balloon payment, along with the payable amount.

  5. Lack of Affordability Checks: Buyers might have been mis-sold car finance when salespeople neglected to conduct affordability checks, leading customers into agreements they couldn't afford. Those facing financial struggles, debt, or missed payments due to long-term agreements they couldn't afford may be eligible to claim for compensation.

Unaffordable Lending


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