FAQs on Car Finance Hidden Commissions

Hidden commissions in car finance are undisclosed payments made by lenders to brokers or dealers. Unlike standard commissions, typically known to the buyer, hidden commissions are not transparent, leading to potential conflicts of interest and unfair pricing.

Review your finance agreement for any undisclosed fees or unusually high interest rates to identify hidden commissions. Look for terms like 'commission' or 'referral fee' without clear explanations. Comparing your agreement's terms with market rates can also be insightful.

Hidden commissions are generally considered unethical and illegal, depending on the context. The Financial Conduct Authority (FCA) has set regulations to curb such practices, emphasising transparency and consumer protection.

Gather all relevant documents, including your finance agreement and any related communication, if you suspect hidden commissions. Then, consider seeking advice from a financial expert or a claims management company.

To make a claim, compile evidence of the hidden commission and submit a formal complaint to your lender or broker. Detail how the agreement was misleading and request appropriate compensation. If the matter remains unresolved, escalate it to the Financial Ombudsman Service.

While you can make a claim independently, navigating the complexities of financial agreements can be challenging. Due to their expertise, professional help from claims management companies can increase the likelihood of a successful claim.

Claims management companies specialise in identifying hidden commissions and assisting consumers through the claims process. They handle the necessary paperwork, negotiations, and follow-ups, simplifying the process for the consumer.

The duration of the claims process varies, typically ranging from a few weeks to several months, depending on the complexity of the case and the response time of the involved parties.

Compensation usually involves a refund of the undisclosed commissions and possibly additional compensation for any inconvenience or financial loss. The amount varies based on the specifics of each case.

Some claims management companies operate on a 'no win, no fee' basis, where fees are charged only if the claim is successful. However, it's essential to clarify fee structures and potential costs upfront.

If your claim is unsuccessful, you can seek a review or escalate the issue to the Financial Ombudsman Service. They can provide an independent assessment and potentially overturn the decision.