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Martin Lewis warns Brits to act now in compensation warning if you bought a car before 2021

Martin Lewis warns Brits to act now in compensation warning if you bought a car before 2021

'Millions of people are owed billions of pounds,' the Money Saving Expert says

Martin Lewis has issued a fresh warning when it comes to his latest campaign to put what he says is billions back in the pockets of ordinary people.

The Money Saving Expert founder, who spends his days issuing clever finance tips for the public to take advantage of, was back on TV this week for his The Martin Lewis Money Show Live programme on ITV1.

This week, the vast majority of the show was dedicated to an issue that Lewis says impacts millions of people who are 'owed billions of pounds'.

It relates to the issue of buying a car before 2021 and in particular, if you bought the car on finance.

Lewis says that if you bought your car, van or motorbike with a Personal Contract Purchase (PCP) or finance agreement then you could well be in line for some money thanks to an ongoing Financial Conduct Authority (FCA) investigation he has described as 'historic'.

More than 10,000 experts are investigating the issue, the FCA says, which focuses around where people who bought their cars on PCP or other finance agreements might have been unfairly charged inflated prices.

On his Money Show, Lewis said claims have been lodged regarding car dealers, who it is reported were told by credit lenders organising deals that they could receive more commission by simply increasing the cost of the finance package for the customer.

Listen to Mr Lewis.
Karwai Tang/WireImage

Following this, Lewis released a new episode of The Martin Lewis Podcast on the same issue where he dedicated the show to talking people through 'everything they need to know' about the issue.

One of the major things for Lewis was time, which he said very soon could not be on the side of those who took out car dealerships.

At the moment, the investigation relates to finance deals issued between 2007 and 2021.

On the podcast, Lewis revealed that in the 24 hours since the show aired on ITV1, 130,000 complaint letters had been lodged.

It is also assumed 40% of those who had this kind of finance were mis-sold, with the average payout expected to be £1,100.

"If you macro all that up, those complaint letters generated in the first half day of this campaign - and it has gone from zero to hero in half a day - would likely mean £57 million being paid back... this is enormous," Lewis says.

Thinking about putting in a complaint? Do it now, Lewis says.

He said: "Millions of people in the UK overpaid without knowing, you will not know if this is you.

Taken out a PCP agreement before 2021? Act now.
Getty Stock Images

"In January 2021, the regulator banned discretionary commission arrangements. And in January this year, it launched a huge investigation into this.

"My view, which predicates everything I'm going to say, and is an assumption, is that it would not have launched that investigation if it wasn't sure footed this was a systemic form is mis-selling that affects huge numbers of people and is going to rule that people are owed money."

He added: "Because of that investigation, firms do not need to deal with complaints at the same timeline they normally do. It's extended the period they have to reply until the investigation concludes.

"However my view very strongly is everybody who thinks they could be affected should be getting their complaints in now.

"There's a lot we don't know here. I'm assuming it will say this is systematic mis-selling and people are owed money but we don't know what the time situation will be.

Billions could be paid out.
Getty Stock Images

"We don't know exactly when you need to get your complaint in and if there will be any time limits - I think there may be time limits - so the sooner you get your complaint in, the sooner it's logged that you have complained and the more surety you have that you wont be time barred."

Sheldon Mills, executive director of consumers and competition at the FCA, said: “We are taking a closer look at historical discretionary commission arrangements in the motor finance market following a high number of complaints from customers, which are being rejected by firms.

“If we find widespread misconduct, we will act to make sure people are compensated in an orderly, consistent and efficient way.”

According to the Financial Times, the total costs of this investigation to the car finance industry could be as high as £13 billion.

Featured Image Credit: Karwai Tang/WireImage/Getty Stock Images

Topics: Travel, Martin Lewis, ITV, TV and Film, Money, Cost of Living, UK News