Is PCP the new PPI?

A consumer’s perspective

It’s all over the internet. Type in PCP claim and you’ll find no shortage of no win, no fee claims handlers who’ll tell you that you may be entitled to hundreds, if not thousands of pounds in compensation. You must check out the golf betting sites. And so we ask, is PCP (Personal Contract Purchase) the new PPI (Payment Protection Insurance)?

An extract from one of the claims handlers reads “Unknown to customers buying vehicles, lenders systematically incentivised brokers and car dealers to charge their customers higher interest rates so they could receive higher commissions themselves”.

The same claims handler goes on to quote a car dealer, who allegedly said “Frankly, we were getting away with murder. We weren’t treating customers fairly and were, in effect, charging them to earn us money”. Another dealer is reported to have said that lenders “let us car salesmen adjust the interest rate on customer loans in order to boost our commission”.

One of the solicitors from this claims management company is quoted as saying “What makes these cases stand out is that the perpetrators knew full well that they were misguiding trusting customers for their own financial gain”.

The FCA brought in new regulations, which came into force in January 2021, banning certain types of commission payments. So, cars sold with finance up to this point may be eligible for a claim.

An insight into the corporate perspective

The investigation is complete. The results aren’t easy reading. The FCA has taken its stance, and now it’s time to brace for impact.

What happens next though?

Firstly, lenders will need to create the Operating Model – the policies, processes, organisation, technology, etc. which they’ll use to manage their response as a myriad of claims heads their way. The money men and women will be crunching the numbers and modelling best case and worst case scenarios, and soon they’ll ask the predictable question …

“How do we get closer to the best case scenario than the worst case scenario?” For some, that’s where the questions stop. For others, the next question is “how do we change our culture so that we act with integrity and every decision we take is as if we had a customer sitting in the room with us?”

The benefits of experience

How2-Change has worked with organisations asking questions just like those. We don’t like to blow our own trumpet, but if we did we might reference the 9% efficiency opportunity we unlocked for a FTSE 100 retail business by helping it to translate its ambitions to become more customer centric into ways of working across 800 sites and 5,000 staff and won an award.

Want to read more?

Why not follow us on LinkedIn?