Recent years study focused on the issue faced by UK citizens mainly of mis-sold PCP Claims finance agreements.Personal Contract Purchase (PCP) is a form of loan to help you buy a car. It's a kind of financing that enables the UK citizens to purchase their vehicles with lower monthly installments . A PCP agreement is a good way of owning a car for a short period of time. These claims were made to deal with the car finances. If the terms are not fully explained or were unsuitable like balloon payments, monthly installments and mileage restrictions. Consumers can take legal actions for it. Complainants can be filed through respective companies or other actions to be taken if the owner doesn't cooperate if necessary.

 

Areas of concern=

PCP agreements often include various factors regarding the car's condition and mileage limitation, in case if these exceed as per limit or have excessive wear and tear , customers may face additional charges for it.

 

PCP FINANCE AGREEMENTS:

 

It includes initial deposit payment followed by several monthly payments over a fixed time period usually between 2-4 years.At the start of contract, buyer lays an initial deposit usually between 10% to 30% of car's value, Whereas remaining balance is financed through monthly installments typically ranging from 24 to 48 months. At the end of the agreement the customers have 3 options which they like to consider:  a final balloon payment to own a car ,return the vehicle without any further conditions and also can trade it with another vehicle under the new PCP agreement. This flexibility of financing is one of the major reasons for the popularity of PCP among UK citizens. 

The lender remains the owner of the vehicle till agreement is fulfilled . However lenders often failed to disclose sales commissions, interest rates, and terms, leading to mis-selling and violation of citizens rights by misleading them.



COMPENSATION AMOUNT:

 It depends mainly on 

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    Vehicle value

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    Agreement time period

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    Amount of interest you were mis-sold. 

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    Payment you have made so far

 

CAN YOU CLAIM?

Yes , you surely can if you fulfill following categories=

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    Have suffered financial loss.

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    Seller misguided you and did not provide complete information.

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    Have purchased a vehicle under PCP finances within the last 10 years.

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    Annual percentage charged to you was more than 4.9%.

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    The deal wasn't at best interest rate causing you to lose your money.



Types of PCP Claims:

  • HIDDEN COMMISSION CLAIMS: Lenders earned commissions without their customers knowing.

  • UNAFFORDABLE LENDING CLAIMS:  Lenders failed to conduct proper affordability checks.

  • MISREPRESENTATION CLAIMS: Lenders misrepresented terms or failed to disclose essential information.

 

Timeline:

  • Claim submissions: 8 weeks to several months.

  • Lender responses:  8 weeks.

  • FOS review:              Additional 3-6 months.

 

 Claiming process: 

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    Check Eligibility:  Consult claim management companies.

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    Gather documents: Finance Agreements, Statements.

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    Claim Submission: To a lender or claim management company.

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    Lender Response: 8 weeks to respond.

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    Financial Ombudsman Service ( FOS): If lender rejects claims.

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    Charges: Typically ranging between 20-30% of recovered funds. 

 

REGULATORY FRAMEWORK:

Financial Conduct Authority(FCA) regulates PCP finance agreements. The FCA’s guidelines ensure lenders:

 

  • Conducting thorough affordability checks.

  • Disclosing all fees and commissions.

  • Provide clear agreement terms.

 

Regulatory Authorities for customer protection: 

Consumers are protected by= 

  1. Consumer credit Act 1974

  2. Financial Ombudsman Service 

  3. Citizens Advice bureau 

 

What if lender rejects : 

If the lender refuses to cooperate, consumers can consult the Financial Ombudsman Service , which is an independent body that helps resolve these issues. When submitting a case to FOS consumers should prepare a comprehensive account of their situation including relevant details and documents. The FOS will review the case and make a decision which the finance provider has to follow at any cost. 

 

Possible outcomes of Compensation 

1 -Full refund= All fees and interest repaid. 

2- Partionate refund= Partial refund based on mis-sold amount.

3- Debt cancellation= Outstanding debt is canceled .

how to contact Legal Assist to make PCP claim Process easier

In order to understand and especially when making this claim, it becomes useful to engage the services of legal expertise in the form of attorneys specializing in PMI or PCP legal cases. Getting in touch with a Legal Assist will prove very helpful since one will receive the necessary advice, help and comfort starting from the filing of the claim. A Legal Assistant can collect important papers, communicate with the insurance company, and argue with healthcare providers for you. They will assist in explaining the many aspects of the claim such as the forms, paperwork and deadlines to make sure you have complied with all formalities appropriately and in time. Furthermore, a Legal Assistant will be able to keep you up to date on your claim’s status, reduce the risk of mistakes or slow processes, and give you reassurance during an otherwise frustrating process. That is why when you decide to deal with a Legal Assistant, you are sure you’ll deal with your PCP claim with a lot of ease.

 

Conclusion:

 By being proactive and informed, individuals can navigate complexities of PCP agreements and ensure they are treated fairly by finance providers . If an issue arises, they should not hesitate to seek assistance from customer service . Understanding these rights and claims can help them to make informed decisions and protect their rights in car financing.