FCA to Investigate Mis-sold PCP Claims

The Martin Lewis Money Show Briefly Touched On This

A woman in a red cardigan hands over a set of car keys to a man in a suit
Author: Samuel Beckingham
Updated: Jan 17, 2024
4 minutes read

As explained on The Martin Lewis Money Show, the Financial Conduct Authority (FCA) is looking into complaints to do with mis-sold personal contract purchase (PCP) agreements. After the investigation, the watchdog will provide a ruling as to whether consumers will be able to make a claim for mis-sold PCP.

Martin Lewis briefly explained a bit about the investigation, and mentioned how PCP has the potential to be as big as PPI. In his view, this could be around a £40 billion injection of money into the economy. Depending on how the investigation is handled, millions could be owed thousands back.


Back in 2021, the FCA put a ban in place that effectively stopped car dealerships from increasing the amount of interest they were able to charge to customers. By altering the interest, sales people were able to maximise and directly manipulate how much commission they could receive.

After banning the practice, the FCA believed it would save consumers around £165 million a year. The only issue is that they’ve received 10,000 complaints about mis-sold PCP since and are looking into whether claimants are able to receive compensation.

Martin Lewis Money Show

On his informative programme, Martin Lewis explained several aspects of the investigation. This is all relatively new, but there’s a provisional aspect of claims having been wrongly rejected by some companies.

There’s also a key deadline for anyone who had a vehicle through PCP or hire purchase (HP) before 28th January 2021. It was only after this date that the ban on discretionary commission was put in place by the FCA. This cutoff point means that millions of drivers are potentially eligible to make a mis-sold PCP claim based on huge amounts of commission.

“I think it will be far more like it did with PPI. It will come up and say, ‘If people are in this situation, you must give them this much money, there is no choice about it.’ And people will have to complain to get that money.”

Martin Lewis – The Martin Lewis Money Show Live

Mis-sold PCP Claims

There are a number of different reasons why you would be able to make a mis-sold PCP claim. It’s not just about the high levels of commission that may not have been conveyed to you at the time.

If you ever took a car out on PCP or HP, you could be eligible to make a claim if any of the following applies:

  • Your contract wasn’t explained clearly to you, including any fees you’d pay, the total cost and interest rates charged

  • The ownership of the vehicle during the contract wasn’t explained

  • Your loan was unaffordable, and the seller knew this at the time

  • Alternative financial options weren’t offered

  • You were pressured into taking additional insurance that you didn’t need

Why Is the FCA Investigating?

It was recently revealed that around 10,000 consumers contacted the FCA to claim mis-sold PCP for historic deals before the 2021 ruling. While a couple of complaints have been upheld in favour of consumers, the watchdog is looking into whether these new complaints will open up the floodgates for mass claims for compensation.

Back in November, there were genuine fears that mis-sold PCP could be the new PPI.

In effect, the process has been paused during the investigation and only applies to claims that have been sent directly to the FCA. If you contacted your dealer and didn’t agree with their decision, you may have then sent your complaint to the FCA.

“If we find widespread misconduct, we will act to make sure people are compensated in an orderly, consistent and efficient way.”

Sheldon Mills – FCA Executive Director

This pause will last for 9 months, and only applies to complaints where there’s dispute about the amount of commissions charged. Any claims put through to the FCA from 17th November 2023 or later and before 25th September 2024 will be affected.

Normally, consumers have 6 months to refer their complaint to the ombudsman, but depending on the ruling of this investigation, this could be extended to 15 months.

What If I Was Mis-sold PCP?

If you were affected by mis-sold PCP, there’s a chance that you could receive compensation. As Martin Lewis explained on his show, even though the FCA has frozen complaints after 16th November 2023, you can still have them logged by the company. They won’t be able to process them, but they will still have to log them.

If a cutoff point is going to be introduced following the investigation by the FCA, it’s better to have your complaint in early. This will ensure that you won’t miss out.

Whether you believe the commission was too high or the details weren’t properly explained to you, you could be eligible to claim mis-sold PCP compensation.

The easiest way to check your eligibility is by clicking on the button below.