Mis-selling finance claims – Ignore at your peril!


Data subject access requests and various letters quoting CONC and the Consumer Credit Act are being received requesting lots of documentation to be provided.

Author: John McDougall
Reading time: 3 minutes

This article is 2 months old.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

In February 2022, I wrote a legal update regarding the FCA’s review of motor finance discretionary commission models and consumer credit commission disclosure that had triggered the “no win, no fee” scenario with solicitors and claims management companies. These companies are engaging with consumers in an attempt to make mis-selling finance claims against our members for compensation.

Data subject access requests and various letters quoting CONC (Consumer Credit Sourcebook) and the Consumer Credit Act are being received requesting lots of documentation to be provided and confirmation of how much commission was earned on the finance deal. We have been successfully responding to these letters without any turning into a formal claim or any money being paid by our members.

However, we have received a couple of court claims from members where they had not initially engaged with either the solicitor or claims management company and this has resulted in a money claim landing at their door. Both cases have two defendants, the lender and the motor dealer, this would suggest the lender has not been particularly forthcoming with any responses either.

So, this really is a word of warning, do not ignore these letters! Send them over straight away, so we can deal with them on your behalf and “keep the wolves at bay”!

We are aware of a case that has gone through the full court process (not our member!) and this is now being used as a “scare tactic” by firms of solicitors, in an attempt to get motor dealers to settle on a compensation amount so the claim does not go to court. This is a common practice for solicitors, however in this case, as it was dealt with by the County Court, it does not set a precedent. Therefore, any other cases are distinguishable, which effectively means you can still provide reasons to affect the decision of a case that is under consideration differently from a similar case that is referred to as a precedent.


Websites for dealers small and large

Composer is a next-gen automotive platform that has been designed from the ground up to give you an intuitive way to promote your stock. You have extensive stock management options, and you'll gain a brilliantly responsive new website to advertise your stock, starting at just £39.99/month.

Also to note in this case, the defendant was the lender and not the motor dealer. The original decision was case dismissed as the judge decided the consumer had suffered no loss of money because they would have got the car anyway. However, the consumer appealed and the verdict was overturned as the court deemed the relationship was unfair.

Until a precedent is set, these cases will be dealt with on an individual basis and our advice is that if you do not want a court case on your hands, make sure such issues are dealt with in a timely manner. To reiterate, this means forward all relevant correspondence to Lawgistics and we will respond on your behalf.

John McDougall

Legal Advisor

Read more by this author

Getting in touch

You can contact us via the form or you can call us on 01480 455500.