How to Reclaim Compensation for Mis-Sold Agreements

Thousands of UK drivers may have been mis-sold car finance by Black Horse, a subsidiary of Lloyds Banking Group. This mis-selling often involved hidden commissions and inflated interest rates. If you financed a vehicle through Black Horse between April 2007 and January 2021, you could be entitled to compensation.

What Is a Black Horse Car Finance Claim?

A Black Horse car finance claim arises when a customer was misled or inadequately informed during the finance agreement process. Common issues include:

• Undisclosed Commissions: Dealers received commissions from Black Horse without informing customers, leading to higher interest rates.
• Inflated Interest Rates: Interest rates were increased to boost dealer commissions, not based on customer creditworthiness.
• Lack of Transparency: Key details about the finance agreement, such as total repayment amounts and balloon payments, were not clearly explained.

These practices were part of discretionary commission arrangements, which the Financial Conduct Authority (FCA) banned in January 2021 due to their unfair nature.

Lloyds Banking Group’s £1.1 Billion Provision

In response to a significant Court of Appeal ruling in October 2023, Lloyds Banking Group increased its compensation provision by £700 million, bringing the total to £1.1 billion. This ruling determined that undisclosed commissions were unlawful, even if the borrower had not directly challenged the fairness of the agreement. As the owner of Black Horse, Lloyds faces substantial exposure to mis-selling claims.

Eligibility Criteria for a Black Horse Car Finance Claim

You may be eligible to claim compensation if:

• You financed a vehicle through Black Horse between April 2007 and January 2021.
• You were not informed about dealer commissions or how they affected your interest rate.
• The finance agreement was unaffordable or not adequately explained.
• You felt pressured into accepting the finance deal without understanding all terms.

Even if your agreement has ended or the vehicle was repossessed, you can still make a claim.

Discretionary Commission Arrangements (DCAs) in Black Horse Agreements

Discretionary Commission Arrangements (DCAs) allowed car dealers to set their own interest rates on Black Horse finance agreements. The higher the interest rate, the bigger the dealer’s commission – often without informing customers. As a result, many faced inflated costs and unfair deals. Car Claim Specialists claim history shows that 90% of Black Horse agreements reviewed involved DCAs. If your finance agreement had a DCA, there’s a high likelihood it was mis-sold. You could qualify for a full refund of the hidden commission and any excess interest charged.

How Much Compensation Could You Receive?

Compensation amounts vary based on factors like the loan size, interest rate, and agreement duration. Some claimants have received between £1,200 and £1,800. For example, a borrower with a £7,619 loan at 5.5% interest, when the lowest available rate was 2.49%, received £1,299 in compensation.

Steps to Make a Black Horse Car Finance Claim

1. Check if you’re eligible – Complete our car finance checker to check your edibility for a Black Horse car finance claim. We begin by reviewing your car finance agreement thoroughly. Looking for terms that were not clearly explained or disclosed at the time of signing. This step is crucial in identifying any misleading information or hidden fees that could constitute as car finance mis sold.
2. Gather your documentation: We collect all related documents, such as the finance agreement, communications with the finance company, and payment records. Organised documentation strengthens your case by providing a clear trail of evidence when submitting a car finance claim.
3. Negotiate: One of our Legal Panel firms will process and negotiate your claim. Consulting with a legal expert who specialises in financial mis-selling can offer significant advantages. They provide a professional assessment of your case and guide you through the legal intricacies of filing a claim.
4. File your claim: Once you have everything in order, or legal panel firm will submit your claim to the finance company or through a financial ombudsman service.
5. Compensation: If successful, you could receive compensation for the overpaid amounts and potentially additional damages.

Time Limits for Making a Claim

You have up to six years from the date of the agreement or three years from when you became aware of the mis-selling to make a claim. However, due to the ongoing FCA investigation, these time limits may be extended.

Final Thoughts

The mis-selling of car finance by Black Horse has affected many UK drivers. With Lloyds Banking Group setting aside £1.1 billion for compensation, now is the time to review your finance agreements and seek redress if you were mis-sold. Taking action promptly ensures you don’t miss out on potential compensation.

Check your eligibility and start your Black horse car finance claim today with Car Claim Specialists. Recoup your losses and get the compensation you deserve.