£41 Billion Industry Exposed The True Scale of the Motor Finance Mis-Selling Scandal

The True Scale of the Motor Finance Mis-Selling Scandal: £41 Billion Industry Exposed

In this eye-opening episode of the Sentinel Legal Podcast, we dive deep into the shocking reality of the UK motor finance industry and uncover the true extent of the car finance mis-selling scandal. Based on extensive research and data from sources like the Finance and Leasing Association and real-world insights from Sentinel Legal’s successful litigation cases, we break down just how widespread the problem really is.

Did you know that in 2022 alone, £41 billion worth of car finance loans were created in the UK? That's 2.18 million car finance agreements, affecting everyday people like you and me. 🚗 But what does that mean for you? The average car finance agreement was £18,772, and thanks to the car finance mis-selling scandal, the average redress owed per individual is around £2,391.

But it doesn’t stop there.

The Financial Conduct Authority (FCA) conducted their own research and revealed that 75% of car finance agreements in the UK were mis-sold due to unfair discretionary commission structures. This meant lenders and dealers could hike up interest rates to earn bigger commissions, all at the expense of consumers. As a result, £1.9 billion in compensation is owed to consumers who took out car finance agreements in 2022 alone!

Across the years, the numbers are staggering:
- In 2019, at the height of the motor finance boom, £2 billion in compensation is still owed.
- From 2009 to 2022, over £861 million in compensation needs to be paid out due to mis-sold car finance contracts.

At Sentinel Legal, we've been leading the charge in motor finance mis-selling litigation, winning hundreds of cases for our clients. We’ve used this wealth of information to calculate just how much compensation could be owed to you.

But why hasn’t more been done?

In response to this growing scandal, Sentinel Legal took decisive action. We wrote a letter to the UK government, specifically addressing Rachel Reeves, the Chancellor of the Exchequer, and Angela Rayner, the Deputy Prime Minister, to highlight the sheer magnitude of the motor finance mis-selling issue. We presented them with these shocking figures and urged the government to take action and ensure that consumers across the UK receive the compensation they are rightfully owed.

This is more than just a financial issue—it’s a consumer rights crisis.

If you’ve had a car on finance at any point in the last decade, there’s a good chance you’ve been affected by this scandal. In this episode, we lay out all the numbers and explain what this means for you, and how Sentinel Legal is fighting for justice on behalf of car finance consumers across the country.

Tune in to find out how much you could be owed and why this issue is only growing larger by the day.

#MotorFinance #CarFinanceMisSelling #ConsumerRights #FCA #FinanceScandal #SentinelLegal #UKGovernment #FinancialCompensation #LegalPodcast #Finance

Transcript

We did this to send to the government, the UK government to say, this is like you need to get behind this. Really? Yeah. When we were doing this research for car finance, we was basically trying to figure out how big the market was and how big the level of missile was, and we we pulled together a load of notes from mainly the Finance and Leasing Association, which is a big, um, representative of all the motor motor dealers, the car finance dealers, the car finance lenders, etc., etc. so what we actually found was a number that allowed us to calculate how big of a industry this, um, car finance situation was and what we found that in 2022 alone, there was 41 billion per hour in car finance. Wow. So £41 billion worth of loans were created in 2022 specifically for people like you and me who want to buy cars. Okay, so that was 2.18 million car finance agreements generated in 2022 alone. Right. So I'll just go through the numbers. So from 2009 to 2022, which is what we had, the numbers of the average finance agreement for a car was £18,772. Right. No way. Yeah 18,000. That was the average. Obviously there's that means there's less and there's more. But what we figured out that there was an average just based off the information that Sentinel's got from taking all of these claims to court. Right. And winning in court, we worked out that the average someone would be owed would be £2,391. Wow. So the average person in the street would be owed £2,300, £2,391. That's based off of what we at Sentinel have seen from all of the wins that we've got so far, and we've got hundreds of them. Wow. But there's a there's a big bot here and this is where the FCA has come out and said not every single lender paid a commission that they could fluctuate, meaning if they sold you a higher interest rate car finance product, they would earn more commission. So there's this this discretionary commission, as it's called, or a fixed commission where you would just earn maybe 500, a thousand, £2,000, whatever that fixed commission was. So the FCA has done their own research and said 75% of the cars on the road have been have been part of this scam, was 7,575% of the cars on the road. So based off that 75% of the cars on the road, we worked out that in 2022 alone, there'll be £1.9 billion worth of compensation. Wow needs to be paid out. Wow 1.9 billion in in 2022 alone. That is crazy. That is absolutely crazy. Yes. But so from 2009, he was at 861 million in compensation based on the amount of car finance contracts that were put out and in the highest peak of it in 2019, according to the FCA. £2 billion worth of compensation is owed on all of the car finance products that were sold in 2019. Wow. So we wrote a letter to the government, which Sentinel Legal actually wrote a letter to the government to highlight how big of a scandal the motor finance mis selling is. So Sentinel Legal wrote a letter Sentinel Legal we wrote a letter to Rachel Reeves. He's the Chancellor of the Exchequer now, and the Deputy Prime Minister, Angela Rayner, and we actually presented them with all of these numbers here. And we said, this is the size of the Michelle. Like, you do not realise how big of a mis sell scam this is. And we worked it out across all of the qualifying years, discounted for the 75% that the FCA has said have been mis sold.