Always sporting shorts, whatever the weather, postman Andrew Wrench is loved by the community he delivers mail to on his Stoke-on-Trent round – not least for the twinkle in his eyes.
But that mischievous glint has sent shivers down the spines of bosses at finance and car companies this month.
For Andrew is the plucky customer who took on lenders that ‘secretly’ pay commission to car salesman to flog their loans – and won.
His fight for justice has resulted in a Court of Appeal decision that’s sending shock waves through the industry and may cost banks £13 billion as they pay compensation for hidden commission taken from seven million motorists since 2007.
Victory: Postman Andrew Wrench’s fight for justice has resulted in a Court of Appeal decision that’s sending shock waves through the industry and may cost banks £13bn
It is truly a David and Goliath tale. But the 60-year-old, from the Staffordshire city’s Trentham suburb, didn’t use a catapult to stop banks in their tracks – just a modest legal team.
The result is that motorists could now receive compensation of up to £1,100 each for mis-selling in what is being described by consumer experts as ‘the new PPI scandal’.
Money Mail tracked down Andrew after his court victory to learn the secrets of his success.
He says: ‘The court described me as a postman with a penchant for fast cars and I must admit that when buying two cars – an Audi TT and a BMW convertible – they were impulse purchases.
My wife Louise and I just love driving.’ He adds: ‘The dealers were desperate for me to sign up to loans. I wanted to pay in cash, but they were not interested – and I should have smelt a rat at the time.’
It all began when the postman spied a shiny red Audi TT in the window of Fast Lane Motors in the city.
Knowing his wife Louise, 46, had always hankered for a sports car he stepped inside and was told by a salesman he could buy the second-hand motor for £8,995. `
He raced home to show Louise. Andrew says: ‘Her eyes lit up. I knew we had to buy it.’ Fortunately, the postman had built up a decent savings pot to cover the full cost.
Andrew says: ‘I asked what kind of discount I could get for cash and was flabbergasted to be told they would not budge on price. It struck me as strange, but I was so in love with the car I agreed there and then to buy it.
‘It was a case of four signatures and away you go – the process was over in a few minutes. The salesman took advantage of my impulsive nature.’
He transferred £3,000 as a deposit and signed up to borrow £5,995 on a 48-month credit agreement at £175 a month.
At the time he only looked at payments rather than the 19.3 per cent APR. Little did he know but the agreement had a commission priced into it, which would be paid to the dealership by the lender FirstRand bank.
Andrew was given the invoice and a page of ‘pre-contractual explanations for a hire purchase agreement and a fixed sum loan agreement regulated by the Consumer Credit Act 1974’ plus six pages of ‘pre-contract credit information’ that he was not encouraged to read.
Dream car: Andrew wanted to buy a shiny red Audi TT that he had seen in the window of Stoke-on-Trent’s Fast Lane Motors for his wife Louise
Then in 2017, Andrew bought a BMW 3 Series for £9,750 (for himself this time). He paid £1,000 in cash and took out a loan for the £8,750 balance over 48 months. The loan company in that case was also FirstRand bank.
He had seen the 2.5 litre sports model on the internet and jumped on a train to see it.
He was met by a salesman at the station in Derby with the car. The man had a smooth sales patter and Andrew says within five minutes at the dealership he was handed a set of keys – after agreeing to a loan for £220 a month.
‘Being told I could drive the car away that day swung the deal. At no point was there a mention of commission.’ This time Andrew paid a 10.2 per cent APR and again given a bundle of paperwork to take away, which he failed to read.
A couple of years later Andrew was looking at yet another vehicle – a Range Rover after selling the BMW – and had a sudden realisation: ‘I have been had’.
He explains: ‘When buying the Range Rover on finance I spotted a reference to commission that I had never seen in any other contract. I went through the small print of the previous car loans.
‘Hidden in the contract bundles I discovered the term “commission”. I was furious. Did this explain why they were so reluctant to let me pay in cash? I wasn’t sure what to do until I spotted a ‘no win, no fee’ advert and gave them a call for legal advice.
‘Cooper Hall of Bradford was open and honest in that it would take 25 per cent commission if it won.’
The postman’s case was heard at Stoke-on-Trent county court in July last year with a legal team from Cooper Hall – two years after he asked them to look into it. He lost but remained undeterred.
Cooper Hall suggested involving Manchester-based Consumer Rights Solicitors – at no extra cost to Andrew. The new solicitor was willing to take the fight to the Court of Appeal, the second most senior court in England and Wales.
The legal teams went through the paperwork and discovered phrases such as ‘a commission may be payable by us to the broker who introduced this transaction to us’.
This type of vague wording was written into many contracts and there is no reason you cannot do the detective work yourself to avoid the expense of a law firm.
Andrew says: ‘The judges at the appeal asked the lender if I was a magician – because the mention of any commission was so well hidden within the contract.
In 2017 Andrew bought a BMW 3 Series for £9,750. He paid £1,000 in cash and took out a loan for the £8,750 balance over 48 months with a secret commission of £408.98
Even when you found it there was no word of the amount paid.’ Money Mail met Consumer Rights Solicitors managing director Kavon Hussain at his office in Manchester to find out how Andrew’s lawyers took on the battle from here.
Mr Hussain says: ‘That three days in court was a real fight. The back of the court was packed with company bosses smugly grinning down on us – but we wiped that arrogant smile off their face. They left looking like ghosts.
‘At no point was Mr Wrench ever told about any commission being paid. Hidden deep within the small-print of the paperwork was the term “a commission may be payable by us to the broker [car dealership]” – but the truth is that there is no “may” about it – they most certainly will.
There is no indication of how much commission is paid. It is clearly intentional that the lender wanted to hide what was really going on.’
He adds: ‘Our case was not about the commission being unfair but on fiducial duty – that the job of the car salesman should be putting clients’ interests above that of a third-party lender. We won hands down on this issue.
The Court of Appeal has said there is not a case for the Supreme Court to hear so this judgment should stand.’ Andrew was told he should be paid back the commission plus interest from when the lender paid out the money.
For the Audi TT the commission was £179.85 and for the BMW it was £408.98. But the relatively modest total is not what interests Andrew – it is the justice of forcing the lender to give back money taken without his consent that has made the whole process worth it.
In the groundbreaking ruling last month, judges said they would ban ‘secret’ commission paid to car salesmen by lenders. Judges found that motorists had fallen foul of hidden costs in loans and must now be compensated.
Another of those Mr Hussain represented at the court hearing was Amy Hopcroft, of Hull.
She signed an HP agreement with Close Brothers Motor Finance to buy a £8,530 car with her local dealership, Jordans. The lender paid the dealer £183.26 in commission. Mr Hussain also won this test case.
Ruling: Judges said they would ban ‘secret’ commission paid to car salesmen and found that motorists had fallen foul of hidden costs in loans and must now be compensated
He says: ‘We are arguing our clients deserve more [compensation] than [just getting] their commission [back] with lost interest. The lenders deserve a slap on the wrists because the commission was effectively a bribe. They must be punished for this.’
Mr Hussain is in combative mood – admitting he has spent more than £200,000 fighting the two cases paying barristers with money that he will not get back.
He says: ‘We are no ambulance chasers – that is a narrative being pushed out by those that do not want to rock the boat. It took us two years to get through the appeals process, but the regulator could have nipped it in the bud years ago.’
Although the lawyer may be out of pocket from these test cases, it is hoped they will open the gates for many more from which the firm can profit. Consumer Rights Solicitors says it typically pockets 25 per cent commission for won cases.
Mr Hussain says: ‘Big costs are part of the business. It is also a matter of principle because we know that we are in the right. It is not all about making money – if this were the case then I would be a solicitor for one of the big banks.’
Most buyers of new cars – about nine out of ten – use financing deals, such as personal contract purchase (PCP) or Hire Purchase (HP) to buy the vehicle.
The court ruling says even if details of commission are buried in the paperwork when signing a deal, lenders will still have to return this money because it was not explained. It has led to a flurry of activity among lenders desperately changing their contracts, to stop motorists being put off borrowing.
Mr Hussain says: ‘The lenders are now running around like headless chickens with a bottle of Tippex – whitening out words such as “may” and coming clean on commission.’
Dean Dunham, the Mail’s consumer lawyer, says anyone who took out such a loan should contact their dealership by letter, sending it by registered post and keeping a receipt as proof of purchase to keep a paper trail of the arrangement in case there is a dispute later on.
He says you should ask if there was a commission arrangement when you purchased the vehicle.
Include details of your loan policy number, name, address and date of birth, plus information about the car you bought and how much it cost. If the dealership fails to get back to you within eight weeks escalate the complaint to the Financial Ombudsman Service.
Industry regulator the Financial Conduct Authority has been looking into the potential scandal since 2021. But the FCA is not expected to announce how the motor industry must deal with the crisis until the end of 2025.
After you have begun your claim, it may be worth waiting for the FCA’s final decision on details of potential compensation rather than going to court yourself through a solicitor.
toby.walne@dailymail.co.uk
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