Got Car Finance Woes? How to Claim Back Mis-Sold Commission - Don't Pay Extra!
2025-08-06
Parkers
Feeling like you overpaid for your car finance? You might be entitled to a refund due to mis-sold discretionary commission. Many New Zealanders were unknowingly affected by this practice, and Parkers is here to guide you through the process – without needing to hand your case over to expensive third-party claims companies. This comprehensive guide breaks down what discretionary commission is, how it can impact your finance agreement, and – most importantly – what steps you can take to reclaim what's rightfully yours. We’ll cover everything from identifying if you’ve been mis-sold, gathering your documents, and making a claim directly to your finance provider. Don’t let them get away with it – take control of your finances and find out if you're due compensation.
What is Discretionary Commission?
Traditionally, car dealerships received a commission from finance providers for arranging car finance for customers. This commission was often 'discretionary,' meaning the dealership could negotiate a higher commission rate with the finance provider. The problem arose when dealerships weren’t transparent about this, effectively increasing the overall cost of the car finance for the customer without their knowledge or consent. This practice was deemed unfair and, in many cases, illegal under consumer protection laws.
Were You Mis-Sold Car Finance? Key Indicators:
Not every car finance agreement with a discretionary commission is automatically mis-sold. However, certain factors suggest you might have a valid claim. Consider these points:
- Lack of Transparency: Were you clearly informed about the discretionary commission and how it affected the total cost of your finance? Did the dealership explain the implications in plain language?
- Unfairly High Interest Rate: Did the interest rate you paid seem significantly higher than what you could have obtained elsewhere? The discretionary commission could have been factored into the rate.
- Pressure to Accept: Were you pressured into accepting the finance agreement without sufficient time to review the terms and conditions?
- Agreement Date: Many claims relate to agreements entered into before the Financial Services and Markets Act 2000 (FSMA) came into effect, but the rules have evolved significantly since then.
How to Claim Back Your Money – A Step-by-Step Guide:
- Gather Your Documents: Collect your finance agreement, any promotional materials, and any correspondence with the dealership and finance provider.
- Contact Your Finance Provider: Start by contacting your finance provider directly. Explain that you believe you were mis-sold car finance due to discretionary commission and request a review of your case.
- Formal Complaint: If the finance provider rejects your initial claim, file a formal complaint. Follow their internal complaints process, which should be outlined in their terms and conditions.
- Financial Ombudsman Service (FOS): If you’re not satisfied with the finance provider’s response, you can escalate your complaint to the Financial Ombudsman Service. They are an independent body that resolves disputes between consumers and financial businesses.
- Legal Advice (Optional): While not always necessary, seeking legal advice from a specialist solicitor can be beneficial, particularly if your case is complex or involves a significant amount of money.
Why Avoid Third-Party Claims Companies?
While third-party claims companies promise easy compensation, they typically take a significant cut of any payout – often up to 35%. By pursuing your claim directly, you’ll keep 100% of any refund you’re entitled to. Parkers provides you with the information and resources you need to navigate the process yourself.
Don't Delay – Act Now!
Time limits apply to making claims, so don’t delay. Review your car finance agreement today and see if you’re eligible for a refund. Reclaiming mis-sold car finance commission can be a rewarding experience, putting money back in your pocket and holding financial institutions accountable.
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