Photo by Kelly on Pexels
Birmingham, a city with a population of 1,144,900 (ONS Census 2021), has been at the centre of motor finance mis-selling issues that have affected an estimated 108,193 drivers (calculated using ONS Census 2021 population data and FCA estimates). This problem has led many residents to question the fairness and transparency of their car finance agreements.
How Motor Finance Mis-Selling Affected Birmingham
Local dealerships such as Sytner Birmingham, Pendragon Birmingham, Listers Group Birmingham, and John Clark Motor Group Birmingham played a significant role in selling
Personal Contract Purchase (PCP) and
Hire Purchase (HP) finance to residents. Major lenders operating in the area include
[Black Horse](https://mlj.org.uk/lenders/black-horse) (Lloyds Banking Group),
MotoNovo Finance,
Close Brothers Motor Finance,
Santander Consumer Finance, Barclays Partner Finance, and
[Alphera](https://mlj.org.uk/lenders/alphera-financial-services) Financial Services (BMW).
These dealerships often sold PCP and HP agreements using
[[discretionary commission](https://mlj.org.uk/glossary/discretionary-commission-arrangement)](https://mlj.org.uk/glossary/discretionary-commission-arrangement) arrangements that favoured certain lenders over others. This meant that residents of Birmingham might have been steered towards finance deals that were not in their best interests.
The FCA Motor Finance Investigation
The Financial Conduct Authority (FCA) initiated an investigation into these discretionary commission arrangements, which were widespread across the UK from 6 April 2007 to 1 November 2024. This period saw 12.1 million eligible agreements (FCA, March 2026), with a total cost of £7.5 billion (FCA estimate). FCA-estimated average overpayment per eligible agreement: £829.
The investigation found that these arrangements led to consumers paying higher interest rates and fees than they should have, resulting in significant financial losses.
How Birmingham Residents Can Check Their Finance Agreements
To determine if you were affected by motor finance mis-selling, Birmingham residents should review their car finance agreements carefully. Look for the following:
- Dates of Agreement: Ensure your agreement was signed between 6 April 2007 and 1 November 2024.
- Lenders Involved: Check if your finance deal was arranged through one of the major lenders mentioned above, such as Black Horse or MotoNovo Finance.
Gather all relevant documents including:
- The original finance agreement
- Loan repayment statements
- Emails or letters from the lender
These documents will help you assess whether your finance arrangement may have been affected by mis-selling practices.
If you believe that you were a victim of motor finance mis-selling, you can complain directly to your lender at no cost. Major lenders such as Black Horse (Lloyds Banking Group), MotoNovo Finance, Close Brothers Motor Finance, Santander Consumer Finance, Barclays Partner Finance, and Alphera Financial Services (BMW) have procedures in place for handling customer complaints.
You do not need a
claims management company to handle your complaint; you can manage it yourself for free. If you are unsatisfied with the lender's response, you can escalate your case to the
Financial Ombudsman Service (
FOS), which provides an independent and impartial service at no cost to consumers.
Sources and References
- FCA estimates on affected agreements: 12.1 million eligible agreements (FCA, March 2026)
- Total cost of mis-selling: £7.5 billion (FCA estimate)
- FCA-estimated average per eligible agreement: £829
- Population of Birmingham: 1,144,900 (ONS Census 2021)
Car Finance Compensation in Your Area
The FCA confirmed that 12.1 million motor finance agreements across the UK qualify for compensation. The FCA-estimated scheme average of £829 per eligible agreement per agreement, totalling £7.5 billion in redress. If you took out PCP or HP car finance between 6 April 2007 and 1 November 2024, your agreement may be eligible regardless of where you live in the UK.
The final deadline to complain is 31 August 2027. You can complain to your lender directly for free. You do not need a claims management company.