ITV News Exposes Hidden Car Finance Commissions in Car Finance Mis-Selling Scandal

ITV News Investigates Car Finance Mis-Selling with Sentinel Legal

The car finance mis-selling scandal is one of the biggest financial compensation cases in UK history. Millions of drivers were unknowingly paying inflated interest rates because lenders and car dealers stacked hidden commission payments onto finance agreements.

In an ITV News investigation, Sentinel Legal's Sam Ward exposes:

• How car dealers were trained to push customers into higher interest finance deals to increase commissions.
• Why 99% of the 31.7 million motor finance agreements since 2007 included undisclosed commissions, according to the FCA.
• How Santander paid £14.96 million in "advanced commissions" to lock customers into expensive finance deals.
• Why millions of car finance compensation claims are currently on hold awaiting a Supreme Court ruling.
• How Sentinel Legal helped Kyle, a real customer, win back compensation for his mis-sold car finance deal.

If you bought a car on finance between 2007 and 2021, you could be owed thousands in compensation.

The Evidence: How the Car Finance Industry Rigged the System Against Consumers

The FCA has confirmed that 99% of car finance agreements since 2007 involved a commission payment. However, these commissions were not disclosed to consumers, meaning buyers had no idea they were paying extra interest to fund dealer profits.

Key Findings from the ITV News Investigation:

• Lenders structured their finance deals to ensure maximum commissions for dealers, even when this meant higher borrowing costs for consumers.
• Consumers were not given the option to negotiate or even see what commission was being paid.
• The lenders and brokers worked together to push higher-interest loans while pretending to offer competitive financing.

Kyle's Story – Sentinel Legal Recovers Compensation for a Mis-Sold Car Finance Client

Kyle is just one of the many Sentinel Legal clients who have received compensation after discovering they were mis-sold car finance.

• Kyle financed his car through a PCP agreement, unaware that a large portion of his payments was going toward undisclosed commissions.
• Sentinel Legal investigated his agreement and uncovered hidden commissions that had inflated his interest rate.
• We fought for Kyle's compensation, and he successfully received a payout for the unfair charges he had paid.

"I had no idea I was being charged extra just to fund dealer commissions. Sentinel Legal handled everything and got me the compensation I deserved!" – Kyle

Santander's Advanced Commissions Scheme: A £14.96 Million Scandal

One of the most shocking findings relates to Santander's "advanced commissions" model, which was used to lock dealers into pushing Santander finance deals over other options.

• Santander paid £14.96 million in upfront commissions to a dealer network, tied to a £75 million loan commitment.
• This created a clear conflict of interest — dealers were financially motivated to push Santander's finance over other, potentially cheaper options.
• Consumers had no idea this was happening — they thought they were getting a competitive finance deal when in reality, they were paying inflated interest rates to fund these dealer kickbacks.

The Supreme Court Battle: Will Lenders Be Forced to Pay Compensation?

• The Supreme Court is set to rule in April 2025 on whether lenders must repay billions in compensation to affected consumers.
• The Treasury attempted to intervene in the case, arguing that forcing lenders to pay compensation would destabilise the banking sector. However, the Supreme Court rejected this intervention, signalling that the ruling will be based on legal merit, not economic concerns.
• If the Supreme Court rules in favour of consumers, lenders will have no choice but to return billions of pounds in hidden commissions.

How Much Compensation Could You Receive?

• The total amount set aside by lenders for redress currently stands at £1.7 billion.
• However, with 31.7 million affected agreements, that equates to just £54.18 per agreement.
• Many consumers unknowingly paid thousands in hidden commissions, meaning the current provisions are far too low.

Sentinel Legal's investigations show that some customers paid over £16,000 in hidden commissions on a single car finance deal.

What Happens Next? The Future of Car Finance Compensation

• The FCA has announced a proposed industry-wide redress scheme, but concerns remain that it will favour lenders over consumers.
• If the Supreme Court ruling favours consumers, banks may be forced to increase their provisions significantly.
• More legal action may be needed to ensure consumers receive full compensation rather than reduced settlements.