Beware of Deceptive Car Finance Adverts
The Financial Conduct Authority (FCA) will issue a warning on Monday about deceptive adverts that appear to offer independent advice on car finance. These ads may actually be paid promotions from claims management companies and law firms, encouraging people to sign up for motor finance claims.
Millions of motorists could receive an average of £829 in compensation for rip-off car finance deals under plans announced earlier this year by the FCA. The watchdog says those affected should use its official car finance compensation scheme.
Identifying Misleading Adverts
The FCA has identified a growing number of adverts that pose as impartial advice from individuals, without clearly stating they are promoting a business. These ads also fail to make clear that you can make a motor finance claim yourself for free.
They might also misuse logos, imagery or references linked to well-known companies, media outlets or public figures to falsely suggest their approval or endorsement, says the FCA.
It revealed that it recently banned adverts from a claims management firm which used edited, unauthorised clips of Martin Lewis of MoneySavingExpert, to make misleading claims about average car finance compensation.
Meanwhile, one firm has already agreed to take down all of their adverts following action by the FCA.
Taking Action Against Misleading Content
The watchdog says it will work with its regulatory partners to take further action to stop consumers being duped into signing up without the right information. It can force firms to remove any content that misleads consumers and prevents them from making informed decisions.
Any consumers that were misled into signing up will be put back into their original position by the firm, and this may include unwinding contracts for free.
Alison Walters, director of consumer finance at the FCA, says: 'Accessing compensation is free, and people don’t need to use a claims management or law firm to get what they’re owed. If they choose to, it should be a genuine and well-informed choice, not one made because of a misleading advert.'
How to Make a Car Finance Claim for Free
If you think you were mis-sold a car loan, you do not need to use a claims management or a law firm to make a car finance claim. Information on how to make a complaint for free is available on the FCA website.
The FCA webpage says the scheme has been legally challenged, which will delay any compensation - it has a statement about this here.
The FCA says: 'We will defend the scheme as the best way to resolve such a widespread and complex issue. The best thing you can do, if you have concerns, is to complain to your lender.'
What to Watch Out For
The FCA will warn on Monday: 'If you choose to use a CMC or law firm, you may have to pay a fee of over 30 per cent of any compensation, and you should not sign up to more than one firm, or you may have to pay multiple fees. The FCA and its regulatory partners have serious concerns about how some CMCs and law firms have been operating.'
Reports of poor practice include:
- Unwanted texts or emails, driving 6 million complaints to the Information Commissioner’s Office this year.
- Consumers being misled by adverts or signed up without their knowledge or consent — for example, by clicking a ‘free compensation checker’ on social media.
- Firms making it difficult for consumers to exit agreements where they have been misled into signing up, aggressively pursuing fees, charging unfair exit fees, or making exaggerated claims for work already done.
- Firms failing to keep clients updated, explain their options fully, or make clear that consumers can take a complaint to the relevant Ombudsman for free.
What If You Already Signed Up?
The FCA says if you have concerns about how you were signed up by a CMC or law firm - including whether you were properly informed and gave consent, how your data was used, the handling of your case, or the fee charged to exit your contract - you should complain directly to the firm.
The FCA has created a template letter, which will be published on Monday.
'If you signed up and now wish to cancel, you may be asked to pay a fee. That fee must be reasonable and reflect the work done,' it says.
'Most car finance claims are still at an early stage, so any fees you’re asked to pay should match the work carried out so far.
'Given the widespread poor practice we have seen, you should check very carefully the basis for any fee before paying it.'
The FCA adds that if you think you have been signed up without consent, misled or treated unfairly, you can ask to exit your contract for free and may also be owed compensation.
'Charges may not be appropriate if CMCs and law firms have not complied with the law in how they have handled your case and your data.
'If you're unhappy with the firm's response, you can take your complaint to the relevant independent Ombudsman.'
Regulated Firms
Firms regulated by the FCA:
Go to the Claims Management Ombudsman.
Firm regulated by the Solicitors Regulation Authority:
Go to the Legal Ombudsman.
The FCA says: They can consider your case for free, including whether the fee you are being charged is reasonable and whether you are owed compensation for unfair treatment. We encourage consumers to use these services to ensure they are treated fairly.
No comments:
Post a Comment