Claims companies and no-win, no-fee law firms are increasingly targeting motorists who have taken out car loans as they believe car finance “could be brewing the next big mis-selling scandal”.
Car finance has grown to be the second most popular type of household borrowing after credit cards, with 6.8m customers. However, complaints have also grown, with almost 11,500 to the Financial Ombudsman Service in 2022-23, up 87%.
Car finance is the third most complained about financial product, after blank accounts and credit cards – and 9 in 10 complaints were lodged by third parties (ie: claims firms).
The proportion of FOS complaints about commission, fees and charges has increased from 24% in 2021-22 to 49% in 2022-23. It is understood claims firms’ confidence in the viability of car finance claims is growing – which is leading to an increasing number of ads for financial compensation on Google, Facebook and Instagram.
Motorists are also being targeted via email.