Hyundai Finance Claims Guide: Get a Refund for Mis-sold Deals

Hyundai Finance has been known as Hyundai’s arm in the car financing industry, and it’s mostly popular for having 0% APR promotions and competitive interest rates for both new and used Hyundai cars. However, with the recent mis-selling scandal, Hyundai has also been investigated and implicated in overcharging customers through inflated interests, unfair commissions, and unfair pricing models. 

If you’ve bought a Hyundai car or any other model financed by Hyundai Financing in the UK between April 2007 and January 2021, then you may have been mis-sold. Since customers weren’t previously aware that dealers could adjust commissions, the PCP and HP finance agreements turned out to be more expensive, resulting in mis-selling. 

This guide explains how Hyundai Finance UK mis-selling happened, how to check your agreement for red flags, and how to claim the compensation you deserve.

What Does Mis-Selling Look Like with Hyundai Finance?

In all financing agreements, customers should be fully aware of all the terms and given all the clear information,  as if not, it can result in a mis-sold agreement. There are many forms of mis-selling, but the two biggest issues, which most financing companies are being accused and guilty of, are the following:

• Discretionary Commission Arrangements (DCAs) – This is the system where dealers earn a secret commission by increasing interest rates on car finance agreements.
• Misleading Sales Practices in PCP (Personal Contract Purchase) – Here is when the case is about hidden costs, balloon payments and penalties which weren’t initially discussed during the start of the agreement

Let’s break these down in detail.

Discretionary Commission Arrangements (DCAs)

Hyundai Finance DCA inclusion has been the most controversial issue in the Hyundai mis-selling claims, as this is a system where car dealers and brokers are given the authority to increase and inflate interest rates, based on what they see is fitting and more beneficial for the commissions they receive. 

Rather than secure the best possible deals for customers, Hyundai dealerships would often inflate interest rates and take larger cuts from the financing. An unfair practice like this has become very common, it almost went unnoticed in the car financing space, resulting in thousands of UK customers overpaying without even realising it. 

To earn higher interest rates, dealers went beyond the line, basing it on the commission they’re getting, rather than creditworthiness, which by standard should be the basis of interest rates on car financing agreements. 

How Discretionary Commission Arrangements (DCAs) Worked

Discretionary Commission Arrangements have been banned since 2021, but it does not hide the fact that there have been a huge number of mis-sold agreements brought about by DCAs itself. But how does a DCA work?

• The dealer has full control over the interest rate

Rather than let Hyundai Finance set a fixed APR for all customers, the system where dealers could adjust the rate without a limit, often ballooning it, allows dealers to earn larger commissions in the process. 

• Customers were kept in the dark about the system that was being implemented 

In the past, buyers had no idea of this malicious scheme that has been gaining traction with dealers and brokers all over UK, more so that their interest rates were purposefully increased. Customers initially believed they were getting a good deal, especially getting financing straight from Hyundai, only to find themselves lining up for Hyundai car finance claim.

• Commissions weren’t transparent

Hyundai Finance wasn’t transparent on how much interest you’re paying for the deal, and it was done purposefully. The intent to not disclose this information is fueled by the eagerness of dealers to get higher commission rates. 

Apart from knowing now what DCAs are, here are the common signs you were amongst the victims of this unfair practice:

1. There was no mention of the commission rate. 
2. The rate was priced overly high.
3. There were no other finance provider choices for you. 

Misleading Sales Practice in Hyundai PCP Finance

Personal Contract Purchase (PCP) agreements have unknowingly become a favourite amongst car financing options brought about by its flexibility. One, it allows buyers to make lower monthly payments, and two, it gives you multiple end options such as buying the car, trading it in, or returning it as well. 

But it also comes with drawbacks of its own. The complexities can be challenging to deal with as well, causing Hyundai Finance PCP claims to grow in number. The controversies around this specific financing option are mainly brought about by the numerous mis-selling claims. 

Here are the common Hyundai PCP finance mis-selling issues. 

Balloon Payments

Most Hyundai buyers believed that PCP finance was the most affordable way to drive a car, but were left out of the details about the large final “balloon payment" which is required if you want to own it at the end of the agreement. Customers initially assume the final payment would be manageable, as this is how it was presented to them by their dealers, only to discover at the end, that they couldn’t afford it, and it would be this hefty sum. It also often leaves customers without. That unexpected final cost discounts what is supposed to be a cost-effective option in the first place, causing a Hyundai PCP claim at present.  

Mileage caps and Penalties

PCP agreements have this mileage restriction, which isn’t favourable to drivers of all types. If you’re thinking of getting a PCP agreement, but you’re also thinking of doing extremely long drives, then you may have to assess your options to know whether you can afford the mileage penalties. Hyundai PCP agreements come with strict mileage limits, often ranging from 6,000 to 10,000 miles per year. Should you exceed this agreed-upon limit, you’ll be then required to pay excessive penalties which could be hundreds or even thousands of pesos depending on the exceeded mile. Mis-selling then occurs when this premise isn’t well-discussed or informed. 

Guaranteed Future Value Issues 

GFV or the Guaranteed Future Value is simply an estimate of how much the car will be worth, at the end of a PCP term. When you enter a PCP agreement, you pay only for part of the car’s depreciation and not the full ownership value, which is what makes the monthly payments lower than when compared to other financing options. The problem that arises with GFV is that there are Hyundai Finance PCP cases where buyers are given inflated estimates, to make them believe that they would still have equity in the car when they reach the end of the contract. This can then be considered mis-selling, as information is not fairly given to consumers leading them to a decision that may bounce badly on them in the end. 

Misleading Car Valuation

PCP agreements require valuations and realistic estimates to prevent them from becoming another mis-sold agreement. The problem with misleading car valuation is that it often leaves customers in a blind spot when they trade-in or sell the vehicle. Most have discovered the car is worth much less than they were initially told, leading to no equity, and sometimes even additional money. 

FCA Crackdown and the Car Finance Scandal: How Hyundai fits into the bigger regulatory picture

Since the advent of mis-selling claims, FCA has been more involved in identifying companies who too played big roles in this flock of complaints against car financing. As a regulatory body, FCA has investigated thoroughly on the issue, and has since been forcing lenders to Hyundai vehicle finance refund to affected customers. 

The widespread mis-selling practices have put the UK’s car finance industry under intense scrutiny for allowing these practices to be a common nature amongst lenders and dealers. But with the crackdown, FCA has been a rampant tool in refunding affected customers, who have been victims to hidden commissions, unfair interest rate hikes and misleading finance agreements too. Now, claimants are closer to having their car loan payouts. 

Now, Hyundai Finance customers are given the chance to reclaim money that may have been overpaid brought about by unfair lending practices. 

What Triggered the FCA’s Investigation?

Discretionary commission arrangement (DCAs) is a system that has been prevalent for UK car dealerships and lenders and this has caused tons of mis-sold deals. These unfair pricing structures make interests inconsistent, and randomly changing for consumers, without following any standard pricing framework.

Rather than present the best Annual Percentage Rate (APR) to customers, dealers inflated the charges to maximise their own profits, at the expense of customers being charged excessively more. When the scheme was discovered, brought about by claims, FCA worked quickly to ban these discretionary models, recognising how this has put customers under unnecessary financial burdens. In 2021, DCAs were dubbed unlawful and banned from any car financing agreements.

The exploitative nature of how DCAs were structured was detrimental to the car financing industry, and millions of drivers were exposed to these unfair terms which then led to a major industry-wide crackdown in 2023. Lenders were demanded to review past finance agreements, and issue refunds voluntarily where mis-selling has occurred. 

What the FCA Crackdown Means for Hyundai Finance Customers?

With the FCA’s investigation of these mis-selling scandals in the car finance sector, new consumer protection initiatives were raised, forcing car finance providers to issue refunds immediately. Here’s what it means for customers:

• Lenders must compensate affected customers immediately

If you are amongst those overcharged by Hyundai Finance through DCA or misleading finance terms, then you may raise concern, as Hyundai will be required to repay the excess interest and commission fees you paid unknowingly. 

• More Consumer Power

With FCA supporting customers on these car financing claims, customers now feel more confident to raise their concerns, and be more reactive on their car financing agreements. The FCA crackdown also gives you stronger rights to challenge the unfair agreements you were misled into.

• Increased scrutiny on PCP and HP deals

Now, Hyundai Finance must be more cautious in how to orchestrate these deals, as the FCA is being more strict with car financing agreements, given the wide-spread scandal. They must provide full transparency on how they structure the deals, and the pricing model involved. 

Eligibility: Signs Your Hyundai Finance Deal Might Have Been Mis-Sold

If you acquired a Hyundai vehicle out of their car finance lending – Hyundai Finance, then you must start reviewing the terms of your contract, as you may have been mis-sold too, considering the occurrence of claims raised from Hyundai customers. Many customers unknowingly overpaid due to hidden commissions, inflated interest rates, and misleading contract terms too.  

To know if you qualify for a refund, here are tell-tale signs:

1. You Were Charged an Unfairly High Interest Rate

Since DCAs allow dealers to charge interest rates based on their own pricing models, many dealerships including Hyundai Finance increased prices in exchange for getting a higher commission. This then meant many customers paid more than necessary without even knowing as these commissions were carefully tucked by increasing the interest rates instead. When charged an unfairly high interest rate, you’d end up paying extensively more. And this meant being mis-sold an agreement. 

2. You Were Not Informed About Hidden Commissions

Commissions in DCAs are purposefully left out in discussions or in the initial presentation of the car financing agreement. This is because, one, it’s not required, and another reason would be the scheme that happens behind doors on car financing agreements. Commissions are boosted by interest rates, so if this is the case, then you may have been mis-sold tool. A way to check this is to ask these questions:

• Did the dealer mention any form of commission they’re getting from me signing the deal?
• Was the commission laid out transparently in the finance documents we have?
• Was the Hyundai Finance deal extremely more expensive than expected?

3. Your PCP Agreement Was Misleading

Hyundai Customers who took out PCP deals between April 2007 and January 2021 should be knowledgeable about the terms and agreements tucked into the contracts. But if full transparency was left out, especially on key terms, like balloon payments, mileage and car valuations, then it is a sign of mis-selling already. How would you know if your PCP agreement was misleading? Here’s a small checklist. 

• There was a payment shock – As a customer, you should be made aware of the final payment, and how much it would be.
• Mileage cap and penalties – Since all Hyundai PCP agreements come with strict mileage limits, then you would want to avoid exceeding them as it means paying expensive fees. If you did pay an expensive penalty cost, then maybe you didn’t know about the mileage cap in the first place or you were misled on the value of your mileage cap. 
• Misleading valuation – The value you were told from the start should stick for the rest of your financing deal. If you were surprised by a change on it, or that the value was less than what was previously told by your dealer, then it can constitute mis-selling. 
  

4. You Were Pressured into Taking Hyundai Finance

Before taking that Hyundai Finance Agreement, were you presented with other options? Dealers should first and foremost prioritise the needs and interests of their consumers, so to do that, they must present you with numerous options, whether you have a good credit standing or not. It’s even better to just reject the application if you think the deal isn’t affordable to them. But if you were pushed into signing, even when you think the deal is expensive, or that you weren’t given the chance to explore other financial options. Here are some tactics that most dealers who practice unfairly utilise on their customers:

• The dealer rushed you to sign the contract, without explaining terms that are crucial to understanding how the agreement works. 
• You were made to believe that Hyundai Finance was your only choice. 
• You weren’t given details or asked about going to alternative lenders. 
• You were told the approval is based on a promotion basis and that not signing immediately will result in the expiration of the deal. 

5. You Struggled to Afford the Payments Due to Misleading Information

Misleading the customer is a huge blow to your credibility as a car finance provider, but integrity was missed upon the influx of these car finance claims. It’s undeniable that there were many Hyundai customers who ended up paying extensively, due to misleading sales tactics. If you were told the deal is affordable, and payments turned out to be high, then you were misled. You should always be aware of any fees that will be charged, and since an affordability check will be made before loan approval, you will know whether the deal is something you can afford. 

Having to refinance or extend your agreement because of affordability issues could also mean you were misled as this should have been something you are able to save up financially unless your circumstances and financial status have changed dramatically due to outside factors. 

What Does the Hyundai Finance Refund Cover?

Hyundai Finance refunds vary in coverage, and the amount you receive will ultimately depend on how much you were actually overpaid, or how the mis-selling has financially affected you. 

1. Overpaid Interest Refund

Since the mis-selling practice in DCAs has caused higher interest rates, dealers will have to refund claimants the amount they overcharged as well. When refunded, you will get the difference between the fair market interest rate and the inflated rate you were charged. You can also get a refund of the excess interest paid on your Hyundai Finance Agreement. 

To give a clearer picture, let’s take this example. 

Your APR was priced at 9%, however similar deals were offered at 5%. Then you will get the 4% interest which was overpaid. Say, you financed £15,000 over four years, then you overpaid by around £1,500 in interest. This overpaid interest can be refunded upon a successful claim, plus additional compensation should you demand for it. 

2. Hidden Commission Refund

Hyundai dealerships who mis-sold deals failed to disclose the commissions they are receiving, which technically means there’s a high chance you paid more than necessary. If this is the case, then a full refund of the secret commission amount will be added to your deal, and compensation for the financial losses you incurred will also be calculated in addition to the refund you’re getting. 

Here’s an example. 

Let’s assume your dealer received an extra £2,000 commission but didn’t disclose it, then it means this is the amount you paid in extra, and will be refunded to you. You can also top up a compensation amount based on the financial loss you experienced from this. 

3. Compensation for Misleading Sales Practices

Additional compensation can also be asked for a mis-sold PCP or HP deal. Misleading balloon payments are unaffordable and if you believe it was smaller than the amount now presented, then you can make a claim. What will happen here, is that you will only pay for the amount which you agreed in the beginning – the one which is realistic and affordable for you. Mileage cap penalties that weren’t fully explained in the beginning, can also be refunded, as well as any other penalty fee payment that wasn’t disclosed initially. In addition, you can ask for compensation for the stress and financial difficulty that resulted from the mis-selling. 

How Much Money Could You Claim?

There are many factors that can affect the cost of a refund you get from a Hyundai finance mis-sold case. If you’re looking for a benchmark amount, there are customers who have received £1,000 and £10,000, and this depends on the following:

1. The size of your finance agreement – this means the amount involved in your car financing agreement. This plays a huge role in how much you can claim, as the size will also dictate how much more money you’ve lost brought about by the mis-selling. 
2. The amount of overpaid interest – how much money you spent in paying the malicious interest rates that were topped up on your agreement
3. The commission amount hidden from you - how much commission did your dealer get from the deal.
4. Additional costs due to mis-selling – This includes fees, penalties and other administrative costs that were charged but not disclosed initially as part of the agreement. 

Filing your Hyundai Finance Claim

If you financed a car through Hyundai financing, then you may have a valid claim. Here are the steps you should take upon discovering mis-selling. 

Step 1: Determine if you were mis-sold a Hyundai Finance Agreement

Before submitting your claim, you have to be able to assess if your agreement really was mis-sold. Does it include any of the following?

• Hidden Commissions or DCAs

Most Hyundai customers who filed claims were victims of DCA, being not informed that their dealers were earning commission from the finance deal. If you weren’t informed there was a commission then chances are you have been mis-sold too. 

• Inflated Interest Rates

If you were charged an interest that is significantly higher than the ones available in the market on a similar deal, then it may constitute a mis-selling too. Also if your Hyundai finance was given a higher APR than what you originally expected, then you may be eligible for a refund as well. 

• Misleading Sales Tactics in PCP Agreements

Customers who weren’t informed correctly and thoroughly about the key terms in their PCP contract. These unclear or incomplete information can vary from balloon payments to mileage cap penalties, and guaranteed future value.

If any of these situations apply to you, there’s a strong chance that you were mis-sold your Hyundai Finance agreement and could be entitled to a refund.

Step 2: Gather All Necessary Documents

If you want to build a strong case against your dealer, based on the case of mis-selling, you need all the documents and evidence you can get, which will prove there was a mis-selling between you and the Hyundai Finance deal. To ensure you have everything ready, here’s a checklist you can follow:

• Hyundai Finance Agreement

Look for details such as APR, loan duration and the payment structure, to know whether there is any mention of commission that was paid to the dealer. Your agreement will play a crucial role in the issue of mis-selling. 

• Bank statements & Payment Records

Gather all evidence of your monthly payment and all fees that were made towards the finance agreement. Having this allows you to calculate how much must have been overpaid brought about by hidden commissions. 

• Emails & Communication with the Dealer or Finance Provider

Keep all records of conversations where the finance terms were discussed, and keep track of all the key details that may have been omitted or misrepresented. Anny proof of your conversation with the dealer is important as it can show how you were mis-sold as well. 

• Marketing & Promotional Materials

If you signed the agreement, because you initially believed there was a different interest offered, and it is based on promotional material, then this could serve as proof of mis-selling. If you were shown a different interest rate rather than the one in the promotional material, then you can use this to support your claim.

Tip: In case you do not have a copy of all these documents, you can request them from your dealer or Hyundai Finance in this case, as it’s necessary that they have these as well.  Under UK financial regulations, they must provide copies of your agreement upon request.

Step 3: File a Complaint with Hyundai Finance

You can't directly escalate your concern, without submitting it first to Hyundai Finance. Filing a complaint to your leader is the necessary first step. Hyundai Finance can easily be contacted, and in fact there are three ways you can do so:

• Via phone – Call Hyundai Finance’s customer service and ask for their complaints department if there is one, or raise your concern to them, so they can escalate properly.    
• Via email or letter – Create a formal complaint letter explaining why you believe you were mis-sold.
• Through an online complaints portal – Some finance providers offer an online form where you can submit claims.  

What to Include in Your Complaint?

• Finance Agreement Number and Personal Details
• A detailed letter explaining how you believe you were mis-sold
• The exact refund and compensation you want to get, such as overpaid interest or hidden commission – You should be able to define what you want to achieve at the end of the claim, so the dealer can assess whether it is something they can actually give or if it’s what’s supposed to be returned and refunded due to the mis-selling. 
• A reasonable deadline – Give them at least 14 days to acknowledge and respond to your complaint. 

Step 4: Escalate to the Financial Ombudsman Service (FOS) If Necessary

Hyundai Finance may reject your Hyundai claim if they think they did nothing wrong, or instead offer a partial settlement which to you may seem unfair, and if this is the case, then the next best thing is to escalate your complaint to the Financial Ombudsman Service (FOS). Here’s a guide on how you can escalate your Hyundai Finance claim to the FOS:

• Visit the FOS website, and submit your complaint through the website, by phone, or by post.
• Provide all the supporting documents which include the complaint letter, Hyundai’s response letter and all other proof and evidence of mis-selling. 
• Explain what caused the decision to be unfair and clearly outline how you were mis-sold by the finance agreement. 
  

The ombudsman can be helpful in making a successful claim, especially if your case really does show mis-selling. They conduct independent reviews of your complaint, and order Hyundai Finance to refund or provide compensation accordingly, based on the financial loss and distress caused by the mis-selling. 

How long does it take?

The FOS can take about several months, given that there are a lot of complaints being raised, in light of the mis-selling scandals. But with the thousands of pounds in refund, surely it will be worth the wait. 

Step 5: Consider Legal Action If Necessary

If the Ombudsman still rejects your claim and doesn’t rule in your favour, or if after an appeal, Hyundai Finance still refuses to compensate you fairly, then the last step is to consider legal action. You may want to:

• Consult a Solicitor who specialises in Financial Claims. There are tons of firms that offer a no-win, no-fee representation for mis-sold car finance claims. This is recommended if you do not want to shell out money initially.
• Join a Group Legal Action. Brought about by the increasing number of mis-sold claims, there are many Hyundai customers who choose to file collective legal claims instead, as this increases their chances of winning compensation. 

Conclusion

It’s equally important to know the right steps in filing a claim if you want to win it, as it’s going to be a tedious process in the first place. When you’re on the right track, then you’ll find it easier to comply with the steps moving forward. While the car finance scandal poses serious issues for the car financing industry in the future, it should not stop you from making a claim. Filing a claim against your dealer is simply making use of your rights, and regaining what you’ve lost.