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Scottish Sun
6 days ago
- Automotive
- Scottish Sun
Key mistake that could see you lose up to 36% in car finance misselling scandal compensation
We reveal top tips for finding out if you're affected below CAR BLOW Key mistake that could see you lose up to 36% in car finance misselling scandal compensation Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) MOTORISTS affected by the car finance mis-selling scandal have been issued a warning over a simple mistake that could prove costly. Impacted drivers should avoid using claims management companies (CMC) or law firms to get compensation, the regulator has said. Sign up for Scottish Sun newsletter Sign up 1 The FCA has cautioned against motorists claiming compensation through CMCs Over 23million people believe they could be owed money due to mis-sold car car finance loans, according to recent research. However, the Financial Conduct Authority (FCA) has cautioned anyone using a CMC or law firm could lose a hefty amount of any payout in fees. The FCA said: "Consumers should be aware that by signing up now with a CMC or law firm, they may end up paying for a service they do not need and losing up to 30% of any money they may receive." The amount of compensation swallowed in fees can be worth up to 36% too, as claims companies can charge additional VAT. The amounts of compensation affected drivers will receive are yet to be confirmed, but someone in line for a £1,000 compensation would see £360 paid out in fees. The FCA is currently waiting for the outcome of a Supreme Court ruling before deciding whether a mass redress scheme for affected drivers will go ahead. It said in June it will confirm within six weeks of that ruling whether a scheme will go ahead. The regulator also laid out how a possible scheme would look and when any compensation could be paid, estimated to be in 2026. What is the car finance mis-selling scandal? The Car Finance Discretionary Commission Scandal affects those who bought a car, motorbike or van on finance before January 28, 2021. After this date, the FCA banned lenders from using "Discretionary Commission Arrangements" (DCAs). DCAs allowed brokers to increase interest rates on car finance loans, which in turn saw their commission bumped up. It has been classed as an unfair practice because drivers weren't told about the DCAs and therefore thought any deals were a fixed price they couldn't negotiate on. But, anyone who took out a vehicle on finance before January 28, 2021, could have been paying more than they should have. The FCA estimates around 40% of car deals bought on finance before 2021 could be affected. Lloyds Banking Group has set aside £700million for potential compensation relating to the scandal. Barclays has allocated £90million, while Santander said last year it had earmarked £295 million for potential payouts. The Royal Bank of Canada has estimated that the industry's bill for motor finance compensation could stretch to £13billion while Which? estimates it could cost them up to £16billion. What could the compensation scheme look like? Lucy Andrews, deputy consumer editor at The Sun, explains what you need to know. The FCA is mulling over what a redress scheme would look like if the Supreme Court rules that drivers should be compensated. The watchdog will set out rules for how claims will be assessed and calculated. There are two main options for a redress scheme: an opt in, or opt out structure. Under an opt-in scheme, you would have to sign up and confirm you want to be included within a certain time limit. An opt-out scheme would mean that customers are automatically signed up. How to find out if you're affected and next steps The website has a tool you can use to find out if you might be in line for compensation. You can find it via It also lets you draft a letter to submit a complaint to the lender or broker who sold you a car finance deal ahead of any Supreme Court ruling. You can also do this yourself. Sarah Coles, personal finance expert at Hargreaves Lansdown, said: "Say (in the letter) why you want to complain, and include as much information as you can. "They should acknowledge your letter within eight weeks, but they don't have to send you a final answer until after December 4 this year – because things have been put on hold while the legal cases rumble on." If you're not happy with your firm's response, you can complain the Financial Ombudsman Service (FOS). Contact details for the FOS can be found via However, it might be worth waiting until the FCA has laid out its next steps for a redress scheme. This is particularly important as some CMCs and law firms have advertised highly speculative figures for how much drivers could be owed in compensation. The FCA has said it will make any scheme easy to take part in without the need for a CMC or law firm. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
Finextra
6 days ago
- Business
- Finextra
AI startup Murphy raises $15m
Murphy, the AI-native platform transforming debt servicing through fully autonomous agents, comes out of stealth after raising $15 million in pre-seed and seed funding to accelerate its expansion across Europe and the United States. 0 This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. The round was led by Northzone, with participation from ElevenLabs, Lakestar, Seedcamp, and existing investors. Debt servicing has historically been a slow, fragmented, and highly analogue industry, relying on costly call centers and generic engagement methods that leave vast amounts of recoverable debt untouched or written off. Murphy is reimagining the process from the ground up. By combining state-of-the-art AI voice agents, omnichannel outreach, and behavioural personalisation, Murphy is unlocking significant value for Debt Collection Agencies (DCAs) and enterprises that struggle with non-performing loans, 24/7 across over 30 languages. "We're building AI-native infrastructure that replaces traditional call centers with a scalable, multilingual solution. It helps companies recover more, faster, and more cost-efficiently, while staying compliant and treating debtors with respect." said Borja Sole, co-founder and CEO of Murphy. Murphy's technology has already been adopted by leading financial institutions, telecommunications providers, and mobility companies across Europe. Current customers include some of the largest banks, telecommunications, utility and debt servicing companies globally. In less than a year since launch, the company is managing hundreds of millions of dollars in debt, demonstrating superior recovery rates and drastically reducing operational costs compared to traditional methods. 'Debt servicing is a $300+ billion global industry that is ripe for disruption. After reviewing countless verticals, this stood out as a space where AI can make a major impact. Given their experience and relentless development speed, Borja and his team are uniquely positioned to transform this space.' said Jeppe Zink, Partner at Northzone. 'Murphy is delivering bottom line impact, to very large organisations in complex and regulated markets— that is extremely rare and a testament to the strength of the product the team has built' adds Pascual Cortes-Monroy, VP at Northzone. Founded in late 2024 by Borja Sole and Marc Sanchez, Murphy's team brings together expertise from fintech, AI engineering, and B2B SaaS. The company plans to use the funding to scale its product, expand its technical and go-to-market teams, and support rapid international expansion.
Daily Record
07-07-2025
- Automotive
- Daily Record
Millions of people due £1,100 car finance compensation update this month
The Supreme Court is expected to issue a final ruling on the scope of the problem this month. A new survey suggests more than 23 million people across the UK believe they could be in line for compensation of around £1,100 over mis-sold car finance loans. The poll found that 45 per cent of people believe they are likely to be eligible for some sort of payout over motor finance deals signed between 2007 and 2021. Consumer groups estimate that motorists took out more than 30 million car loan deals over those years. Regulators and courts have found that many of the car finance deals signed in that period did not properly inform consumers about hidden charges through Discretionary Commission Arrangements (DCAs). Consumer groups estimate that motorists took out more than 30 million car loan deals over those years. The Supreme Court is expected to issue a final ruling on the scope of the problem this month, after which the Financial Conduct Authority (FCA) may set up a formal redress scheme for lenders to compensate consumers. The survey of 4,000 people in June was carried out by the pollsters Find Out Now, on behalf of consumer law firm Slater and Gordon, suggests that public expectations over the car finance issue are running very high. Slater and Gordon said those expectations could create challenges for the FCA in designing any redress scheme. The City Regulator has suggested it may set up the redress scheme in a way that reduces the scope for consumers to hire lawyers to make claims on their behalf. Instead, the regulator could ask the lenders who carried out the mis-selling to check their records and decide who gets compensation. However, less than a quarter (23%) of people surveyed said they would trust the lenders to do this fairly. Slater and Gordon backed the idea of a redress scheme, but warned that the FCA's plans risk widespread disappointment and a potential backlash unless it is carefully constructed to ensure consumers are protected from missing out. Some 40 per cent of poll respondents said they would consider taking legal action to challenge the redress scheme if they are unhappy with the outcomes. The polling also suggests that a redress scheme reliant on lenders to identify and trace victims of mis-selling could miss out significant numbers of people who should get compensation. Among respondents who believe they are entitled to compensation - estimated by consumer champion Martin Lewis to be around £1,100 per vehicle purchase - some 57 per cent said they had moved house at least once during the claims period, something that might make it impossible for lenders to contact them for redress. A further 13 per cent of potential claimants said they changed their legal name during the claims period, which could also make them hard to reach for redress. In addition, 36 per cent of potential claimants - 8.4 million people - said they have lost at least some of the paperwork on their previous car finance deals. Commenting on the findings, Elizabeth Comley, Chief Operating Officer of Slater and Gordon, said: 'The public have very high expectations on the car finance scandal. They rightly expect to be compensated for their losses. 'The FCA is trying to put things right but there's a risk that a redress scheme leaves many people disappointed and keen to challenge the process. That sort of backlash would be bad for everyone - the scandal would drag on for years, the courts would be inundated with challenges and the public would be denied the clear resolution they want.' Ms Comley continued: 'The FCA is trusted by the public to resolve this issue, but the public will not support putting decisions on redress in the hands of the lenders responsible for mis-selling - people just don't trust the wrongdoers to decide who gets compensation. 'An FCA redress scheme that relies on the lenders responsible for mis-selling to identify people who get compensation would mean many people miss out, perhaps because they have moved address or changed their name and the lenders can no longer find them. That would be unacceptable and fuel public cynicism.' The legal expert added: 'The best way to ensure a redress scheme works well for everyone and resolves this scandal swiftly is to allow people the choice to hire a lawyer to support their claim. 'Independent professional lawyers work to assemble documents and evidence, pursue people's rights and ensure they get what's due to them. Why shouldn't people have this option if they want it?' Alex Neill, co-founder of Consumer Voice, said: 'People are rightly concerned about the use of secret commissions in car finance. Millions of drivers feel misled and have suffered financial harm - so it's no surprise that public expectations for compensation are high. 'Our own research shows that two-thirds of consumers would have acted differently if they'd known about dealer commissions, and many remain concerned about how those commissions impact what they pay. 'Any redress scheme must tackle drivers' legitimate distrust of lenders and be built with fairness to consumers at its core. People must be given choice and clear information about their options and the compensation they can expect to receive. Resolving claims quickly is in everyone's interest, but it must not come at the expense of people being denied proper access to justice.'
Scottish Sun
07-07-2025
- Automotive
- Scottish Sun
More than 23million households could be due compensation over mis-sold car finance loans
MORE than 23million people believe they could be due compensation over mis-sold car finance loans, according to new research. Around 45% of people believe they are likely to be eligible for some sort of compensation over motor finance deals signed between 2007 and 2021, according to the poll by law firm Slater and Gordon. 1 Millions of motorists could be due compensation after being mis-sold car loans Credit: Getty Consumer groups estimate that motorists took out more than 30million car loan deals over those years. But regulators and courts have found that many of the car finance deals signed during this period did not properly inform consumers about charges and commission. This is because banks allowed car dealerships and brokers to set their own interest rates on loans. Under these now-banned discretionary commission arrangements (DCAs), dealerships and brokers had a financial incentive to charge higher interest rates, as their commission increased proportionally. But many customers were not aware of this practice. As a result, motorists who finance the purchase of cars, motorbikes or vans before January 28, 2021 - when DCA was banned - could be entitled to substantial compensation. The Supreme Court will this month issue a final decision on the scope of the problem after a landmark Court of Appeal ruling in October 2024. Once this is done industry regulator the Financial Conduct Authority (FCA) may set up a formal redress scheme for lenders to compensate consumers. The FCA began working on this redress scheme in January 2024. Lenders including Barclays, Lloyds, Santander UK and Close Brothers may be liable to pay out £44billion in compensation, analysts have suggested. The FCA has said it may set up the scheme as a way that reduces the scope for consumers to hire lawyers to make claims on their behalf. Instead, the regulator could ask the lenders who carried out the mis-selling to check their records to decide who could get compensation. But less than a quarter of people surveyed said they would trust the lenders to do this fairly. A redress scheme would rely on lenders to identify and trace victims of mis-selling but could miss out significant numbers of people who should get compensation. What is the FCA investigating and who is eligible for compensation? What is being investigated? The FCA announced in January 2024 that it would investigate allegations of "widespread misconduct" related to discretionary commission agreements (DCAs) on car loans. When you buy a car on finance, you are effectively loaned the value of the car while you pay it off. These loans have interest payments charged on top of them and are often organised on behalf of lenders by brokers - usually the finance arm of a dealership. These brokers earn money in the form of commission - a percentage of the interest payments on the loan. DCAs allowed brokers to, to a certain extent, increase the interest rate on a loan, which in turn increased the amount of commission they received. The practice was banned by the FCA in 2021. Who is eligible for compensation? The FCA estimates that around 40% of car deals may have been affected before 2021. There are two criteria you must meet to have a chance at receiving compensation. First, you must be complaining in relation to a finance deal on a motor vehicle (including cars, vans, motorbikes and motorhomes) that was agreed before January 28 2021. Second, you must have bought the vehicle through a mechanism like Personal Contract Purchase (PCP) or Hire Purchase (HP), which make up the majority of finance deals and mean you own the vehicle at the end of the agreement. Drivers who leased a car through a scheme like a Personal Contract Hire, where you give the car back at the end of the lease, are not eligible. This is because they may have moved house or changed other important personal information such as their legal name. Plus, 36% of potential claimants - around 8.4million people - said they have lost some of the paperwork from their previous car finance deals. Meanwhile, 40% of people said they would consider a legal challenge if they are unhappy with the redress scheme. Elizabeth Comley, chief operating officer at Slater and Gordon, said: 'The FCA is trying to put things right but there's a risk that a redress scheme leaves many people disappointed and keen to challenge the process. 'That sort of backlash would be bad for everyone – the scandal would drag on for years, the courts would be inundated with challenges and the public would be denied the clear resolution they want.' How to claim Consumer finance website offers an email template to help you complain to your finance provider. To download this, visit Alternatively, you can complain directly to your provider without using the template. Anyone who took out car finance should file a claim, even if their previous one was denied. In your complaint, ask whether you were overcharged due to your broker receiving a commission and ask the company to rectify this if it happened. If you are not happy with the company's response then you can escalate your complaint to the Financial Ombudsman Service for free. You have until July 29, 2026, or up to 15 months from the date of the company's final response letter to do so, whichever is longer. Avoid using a claims management firm as they will take a portion of any successful claim. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
The Sun
07-07-2025
- Automotive
- The Sun
More than 23million households could be due compensation over mis-sold car finance loans
MORE than 23million people believe they could be due compensation over mis-sold car finance loans, according to new research. Around 45% of people believe they are likely to be eligible for some sort of compensation over motor finance deals signed between 2007 and 2021, according to the poll by law firm Slater and Gordon. 1 Consumer groups estimate that motorists took out more than 30million car loan deals over those years. But regulators and courts have found that many of the car finance deals signed during this period did not properly inform consumers about charges and commission. This is because banks allowed car dealerships and brokers to set their own interest rates on loans. Under these now-banned discretionary commission arrangements (DCAs), dealerships and brokers had a financial incentive to charge higher interest rates, as their commission increased proportionally. But many customers were not aware of this practice. As a result, motorists who finance the purchase of cars, motorbikes or vans before January 28, 2021 - when DCA was banned - could be entitled to substantial compensation. The Supreme Court will this month issue a final decision on the scope of the problem after a landmark Court of Appeal ruling in October 2024. Once this is done industry regulator the Financial Conduct Authority (FCA) may set up a formal redress scheme for lenders to compensate consumers. The FCA began working on this redress scheme in January 2024. Lenders including Barclays, Lloyds, Santander UK and Close Brothers may be liable to pay out £44billion in compensation, analysts have suggested. The FCA has said it may set up the scheme as a way that reduces the scope for consumers to hire lawyers to make claims on their behalf. Instead, the regulator could ask the lenders who carried out the mis-selling to check their records to decide who could get compensation. But less than a quarter of people surveyed said they would trust the lenders to do this fairly. A redress scheme would rely on lenders to identify and trace victims of mis-selling but could miss out significant numbers of people who should get compensation. What is the FCA investigating and who is eligible for compensation? What is being investigated? The FCA announced in January 2024 that it would investigate allegations of "widespread misconduct" related to discretionary commission agreements (DCAs) on car loans. When you buy a car on finance, you are effectively loaned the value of the car while you pay it off. These loans have interest payments charged on top of them and are often organised on behalf of lenders by brokers - usually the finance arm of a dealership. These brokers earn money in the form of commission - a percentage of the interest payments on the loan. DCAs allowed brokers to, to a certain extent, increase the interest rate on a loan, which in turn increased the amount of commission they received. The practice was banned by the FCA in 2021. Who is eligible for compensation? The FCA estimates that around 40% of car deals may have been affected before 2021. There are two criteria you must meet to have a chance at receiving compensation. First, you must be complaining in relation to a finance deal on a motor vehicle (including cars, vans, motorbikes and motorhomes) that was agreed before January 28 2021. Second, you must have bought the vehicle through a mechanism like Personal Contract Purchase (PCP) or Hire Purchase (HP), which make up the majority of finance deals and mean you own the vehicle at the end of the agreement. Drivers who leased a car through a scheme like a Personal Contract Hire, where you give the car back at the end of the lease, are not eligible. This is because they may have moved house or changed other important personal information such as their legal name. Plus, 36% of potential claimants - around 8.4million people - said they have lost some of the paperwork from their previous car finance deals. Meanwhile, 40% of people said they would consider a legal challenge if they are unhappy with the redress scheme. Elizabeth Comley, chief operating officer at Slater and Gordon, said: 'The FCA is trying to put things right but there's a risk that a redress scheme leaves many people disappointed and keen to challenge the process. 'That sort of backlash would be bad for everyone – the scandal would drag on for years, the courts would be inundated with challenges and the public would be denied the clear resolution they want.' How to claim Consumer finance website offers an email template to help you complain to your finance provider. To download this, visit Alternatively, you can complain directly to your provider without using the template. Anyone who took out car finance should file a claim, even if their previous one was denied. In your complaint, ask whether you were overcharged due to your broker receiving a commission and ask the company to rectify this if it happened. If you are not happy with the company's response then you can escalate your complaint to the Financial Ombudsman Service for free. You have until July 29, 2026, or up to 15 months from the date of the company's final response letter to do so, whichever is longer. Avoid using a claims management firm as they will take a portion of any successful claim. .
