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From your PPI to your PCP & PCH

Following on from the explosion in claims for mis-sold  ‘PPI’ or ‘payment protection insurance’, the next potential area for complaint could well be the mis-selling of PCP (Personal Contract Purchases) and PCH (Personal Contract Hire) deals to people who couldn’t afford them.

What is PCP? For those of you looking to buy a new car (or an older one) a PCP deal is basically a loan to help you get a car, but you do not pay off the full value of the car, so you have reduced repayments while you hold the car. At the end of the deal, you can either hand the car back, or pay the final "balloon” payment to own the car. PCH is a long term vehicle rental agreement, whereby you return the vehicle at the end of the agreement.

By way of background, and according to the FCA, UK consumers borrowed nearly £32 billion during 2016 alone to pay for their new or pre-owned cars, with car loans now the fastest growing area of the consumer finance market.

But, the picture is not all rosy, as the Financial Conduct Authority has started to look through the veil of tinted windows and is now scrutinising the motor industry’s sales practices and procedures, with some in the industry predicting that "the investigation will result in leasing companies, dealers and brokers facing huge fines and even going out of business, as well as causing the banks a big headache”.

As the FCA are set to complete their report into Personal Contract Purchase (PCP) it is anticipated that lawyers who acted in the PPI mis-selling claims are likely to turn their attention to PCP and PCH.

We are keeping a close eye on this issue, not just because we like an abbreviation, but also because we can now arrange After the Event Insurance for Financial Mis-selling claims so if you operate in this field, do get in touch to find out more about our ClaimSafe After the Event Insurance.

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