Mr Johnson sold his Suzuki Swift in 2020, but after three years of regular payments, he still owed £3,500 which he assumed then was due to the interest on the loan for the car.
“With paying off the agreement for three years, I had only scratched the surface,” he said.
Dealerships were not acting outside of the rules and regulations of the industry by taking this sort of commission at that time, but they had a duty to inform their clients.
The court of appeal said “burying such a statement in the small print which the lender knows the borrower is highly unlikely to read will not suffice”.
There have been changes in the rules governing commission since 2021, when the Financial Conduct Authority banned discretionary commission arrangements.
Kevin Durkin, from HD Law, who represented Mr Johnson in the test case, said: “As a financial reward for them being chosen, FirstRand Bank paid Trade Centre Wales a commission which Marcus knew nothing about.
“There was only a vague reference to this arrangement in the paperwork which the court of appeal found was buried.
“As such it meant that Marcus paid more than he necessarily needed to.”
He added it was far from being an isolated case, with many car dealerships and finance companies having operated in this way.
“It’s completely widespread,” he added.
“Almost all cars that are purchased on finance through a dealer or credit broker are sold in this way.
“I’ve yet to see any terms and conditions in a case involving my clients where the terms and conditions reference is either absolute in terms of ‘we will receive a commission’ or alternatively is made prominent in the paperwork that is being signed.”
Mr Johnson said he would never use a finance agreement again, but was delighted when the Court of Appeal found in his favour.
“It was a big moment of relief and excitement and obviously happiness all at the same time – especially with how tough things are at the moment,” he said.
He said he hoped others would also get money back, adding: “I’m so happy that my case and the decision that was made could potentially help thousands of other families, to me that’s worth more than the money that I reclaimed in a way.”
