Thousands Potentially Overcharged in Suspected Car Sales Scandal
Central bank faces pressure to investigate car sales scandal as thousands potentially overcharged in suspected interest rate mis-selling dealers were allegedly incentivised to set high-interest rates, earning bigger commissions in the process.
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Similar practices in the UK have led to billions in compensation for consumers. The Irish Central Bank has already banned this practice but is not planning a retrospective probe.
Car Sales Scandal Raises Concerns Over 500,000 Motor Finance Deals in Ireland
Experts warn that around 500,000 motor finance deals in Ireland could be affected. In June, the Central Bank issued a letter banning discretionary commission arrangements (DCAs), where car sales people could set their own interest rates.
UK regulators are investigating similar issues, which may lead to widespread compensation. This came after complaints were upheld by the financial ombudsman and courts.
Sinn Féin’s Pearse Doherty has called for a full investigation into the practice in Ireland. He believes Irish consumers have likely suffered significant losses.
The Central Bank, however, stated it has not received customer complaints and does not plan a look-back review. Consumers with concerns are advised to contact their lender or the Financial Services and Pensions Ombudsman (FSPO).
Motor dealers and banks involved in DCAs have yet to comment, with some expressing willingness to cooperate if the Central Bank takes further action.
