The scandal over mis-sold PCP loans has come after a two-year investigation, conducted by the Financial Conduct Authority (FCA), found a considerable amount of motorists were being overcharged PCP.

The UK’s financial watchdog found that, between them, 560,000 people could potentially have overpaid a staggering £300 million more in interest than was actually necessary.

The investigation also reported that many retailers were not giving their customers all of the facts necessary to make informed decisions on the deal.

Many sellers failed to acknowledge not only that they were receiving commission from these deals, but also that this commission was linked directly to the level of interest charged.

To help produce these findings, the FCA sent mystery shoppers into over 120 retailers, finding that as little as 31% would explain to customers that the car is not theirs until all payments – including the balloon payment – had been fully paid off. In addition to this, only 28% informed the customer about the total amount they had to pay, and also what would happen when PCP payments were missed.

The FCA reported that it was concerned about the way in which these deals could be manipulated by sellers to create higher commissions for themselves, stating:

There are an array of different ways in which you could have been mis-sold PCP. One of the main issues highlighted in the FCA’s report was related to poor selling on the retailer’s behalf.

Much of the concern has been focused on irresponsible selling tactics by the retailer, including not explaining the full cost of the PCP or the outcomes for missed payments.

It’s also been reported that alongside PCPs, some customers are being sold “add-on” insurance, some of which can be expensive and unnecessary. Below is a list with some of the main things to look for if you think you have been miss-sold PCP: