Martin Lewis shares 'next steps' for drivers affected by car finance scandal
Martin Lewis has shared the next steps after over 500,000 people filed complaints over potentially mis-sold car finance.
The MoneySavingExpert.com (MSE) website founder last month shared that millions of drivers could be owed compensation payouts if they bought a car, van or motorbike between 2007 and 2021. According to Martin, during this period "around 40%" of car finance deals contained so-called “discretionary commission arrangements”.
This allowed car dealers to adjust the interest offered to customers, to increase their commission - meaning drivers were often were sold unfairly inflated prices. This practice has been banned since 2021, however, the Financial Conduct Authority (FCA) recently launched a misconduct investigation which could lead to compensation payments to those affected - potentially as high as £1,100 each or £234milllion overall.
Martin Lewis' MSE team noted that the financial regulator likely has substantial evidence so there is a high chance of payouts when the report is published later this year. In the recent MSE newsletter, Martin wrote: "Last Tuesday, we launched our brand new car finance hidden commission reclaiming guide & tool and... wow! In just seven days you've sent over 530,000 complaint emails via it."
The MSE tool allowed people to make a complaint to a car firm themselves rather than use a claims management firm. All you had to do was answer a few questions on the details of your car finance, then the tool would build an email drafted by Martin, lawyers and regulators. You could then send the complaint to your car finance provider.
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In the newsletter, Martin explained his "provisional thoughts" on the next steps to take although noted that it was "uncharted territory". He wrote: "We're monitoring how different firms respond. We aim to launch a 'responses survey' next week, and then publish more detailed help once we know more."
If you’ve not had a reply yet, the MSE newsletter said you shouldn't be concerned as it’s likely the firms are swamped by the number of complaints. You also gave the firm 28 days to respond so you may just need to wait a little longer. If you have been told you had a “discretionary commission arrangement” and your complaint has been logged, then it’s good news as you could be in line with a payout. Unless you’re asked for further information, you’ve just got to wait for the investigation to end in September.
If you’re told you didn’t have a “discretionary commission arrangement” then you weren’t overcharged and don’t need to pursue the claim further. The MSE newsletter warned that if you were told you had a “discretionary commission arrangement” but weren't overcharged, then this is a tactic "designed to put people off". With this, the MSE team say you shouldn't worry as the complaint has been logged so now people will need to sit and wait for the report to be published.
Finally, if you have been told the firm can't find your information, then MSE says it may be a little bit trickier - however, your car finance firm should be trying its hardest to find out. Ideally, you should also help with providing as many details on your case as you can. MSE said: "The more details you can provide, the better."
The MSE team will continue to provide updates on what is happening over the coming few weeks. If you think you may have been missold motor finance, you can use Martin Lewis' complaints tool here.
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