Motor Finance Scandal: Thousands of local victims

Thousands of residents in Carshalton and Wallington could have fallen victim to the motor finance scandal, where finance firms unfairly overcharged customers for car loans.

Bobby Dean MP has been using his position on the Treasury Committee to ask questions of the regulators and has been meeting with legal firms representing local victims. Estimates from those legal firms say there could be as many as 4,000 victims in Carshalton and Wallington alone.

Lenders and car dealers have been accused of misleading customers into taking out car loans on unfair terms. This often involved hidden commissions and customers paying higher interest rates than they should have.

The Financial Conduct Authority (FCA) has already banned one particular practice, called Discretionary Commission Arrangements, where dealers were incentivised to offer higher interest rates in order to get paid a higher commission by the lenders.

Now a recent court case could mean that other arrangements, where the commission element was not made totally clear to customers, may mean thousands more may be owed compensation.

Bobby Dean MP, Liberal Democrat MP for Carshalton and Wallington, said:
"For many people, having a car isn’t a luxury—it’s a necessity. My mum was a cleaner and when her car broke down it meant she lost her income.

“Not everyone has thousands of pounds in the bank to buy a car outright, so loans are increasingly common even for second hand cars.

“The customer has to be able to trust dealers and lenders to act fairly and this scandal exposes that many just haven’t been truthful with people.

“I will keep campaigning on this until those responsible are held to account and the victims get the compensation they deserve.”