Car finance mis-selling is now one of the biggest consumer finance scandals in the UK. The Financial Ombudsman Service (FOS) has reported a sharp rise in complaints, with thousands of customers alleging they were misled. Many claim they were not fully informed about commission structures, inflated interest rates, or unaffordable repayments.
Sharp Rise in Complaints About Car Finance Mis-Selling
The FOS has seen a surge in complaints related to Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements. According to the latest data, complaints rose by 40% in the last year alone (FOS, 2024). Consumers have raised concerns about undisclosed commission payments that incentivised dealers to set higher interest rates. The Financial Conduct Authority (FCA) banned discretionary commission models in January 2021, but the impact of past deals continues to unfold.
How Consumers Were Mis-Sold Car Finance
Many drivers were pushed into deals without fully understanding the long-term costs. Some were not told that dealerships earned commission based on the interest rate, leading to inflated repayments. Others were misled about their ability to hand back the car without facing penalties. Hidden fees, unfair early settlement charges, and inflated final payments have left thousands in financial distress.
What the Financial Ombudsman Says
The FOS has upheld 70% of complaints in favour of consumers over the past year. They ruled that many lenders failed to provide clear, upfront information about how deals were structured. Affected customers have been awarded refunds on excessive interest charges and compensation for financial losses. If you suspect mis-selling, you may have grounds for a complaint and potential refund.
Can You Claim Compensation for Mis-Sold Car Finance?
If you took out a PCP or HP agreement before January 2021, you might have been mis-sold. Look at your contract to check whether commission was added without clear disclosure. If you were not informed about commission payments or the full cost of finance, you could have a case. Many lenders have already started settling claims, with average refunds ranging between £1,000 and £5,000 depending on the agreement terms.
How to Check If You Are Owed an Oodle Refund
If you financed your vehicle through Oodle Car Finance, you should review your agreement for potential mis-selling. Many Oodle customers have raised concerns about high-interest rates and undisclosed commissions. If you believe you were affected, you can file a complaint directly with Oodle or escalate it to the FOS if your claim is rejected.
How to Make a Complaint and Claim Compensation
- Gather your documents – Locate your finance agreement, payment history, and any emails with the dealer or lender.
- Write to your lender – Explain why you believe you were mis-sold and request a refund of unfair charges.
- Escalate to the Ombudsman – If the lender refuses to compensate you, take your case to the Financial Ombudsman Service.
- Consider legal advice – Some claims management firms offer to handle cases, but you can claim for free.
Final Thoughts
The surge in car finance complaints shows the scale of the mis-selling issue in the UK. Thousands of drivers are now reclaiming money they overpaid due to unfair commission structures. If you think you were affected, act now to check your eligibility and start your claim. The longer you wait, the harder it may be to get your money back.
