Martin Lewis has shared the next steps after over 500,000 people filed complaints after his warning for car buyers before 2021.
In January, the Money Saving Expert (MSE) revealed that ‘billions’ could be owed in compensation for motorists who bought their car, van, camper van or motorbike between 2007 and 2021.
Allegations of some dodgy business practices have analysts at Jefferies calculating around a whopping £13 billion might end up needing to be paid out by the industry, according to the Financial Times.
Here’s Lewis’ explanation:
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The Financial Conduct Authority (FCA) launched a misconduct investigation amid concerns that those who bought their vehicle on motor finance might have been unfairly charged inflated prices for loans on second-hand and new vehicles.
The MSE team don’t reckon the FCS would be doing this unless there was substantial evidence so it’s ‘likely’ there’ll be a pay-out when it reports in September.
And Lewis’ view is ‘the sooner you complain, the safer’.
He said in the newsletter: “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.
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“The regulator, the Financial Conduct Authority (FCA), estimates 40% of finance agreements had these dodgy commission arrangements (you won't know if you did as it was hidden) and the average pay-out per arrangement may be £1,100.
"So that potentially equates to up to £234 million coming back to people.”
For those who have complained, the team say it’s ‘uncharted territory’ but shared ‘provisional thoughts so far’ for the next steps.
If you’ve not had a reply yet, the MSE says ‘don’t be too concerned’ as it’s likely the firms are swamped by the unprecedented number of complaints since Lewis announced the tool.
If you’ve been told: “You had a Discretionary Commission Arrangement (DCA) and we've logged your complaint,” then it’s good news as you’re ‘potentially in line’ for a pay-out.
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 DCA,” then it’s more good news as you weren’t overcharged and don’t need to pursue the claim further.
MSE warns if you’re ‘told you had a DCA but… then a fob off’ then it’s a tactic ‘designed to put people off’.
The team’s ‘main thought’ is don’t worry because it’s been confirmed you had one and it’s logged, so really all you need to do is wait. While you can go to the Financial Ombudsman, MSE think ‘it’s safest to hold fire on that until the FCA reports’.
And if you’ve been told 'we can’t find your info' then it’s ‘trickier’.
If it’s been longer than six years since your car finance was active things could be ‘harder’, but your firm should be trying to find it.
“The more details you can provide, the better,” the MSE say.
Lewis’ team are going to keep updating their next steps over the next few weeks, so it’s worth keeping an eye out if you’ve complained.
If you think you may have been missold motor finance, you can use Martin Lewis' complaints tool here.
Topics: Martin Lewis, Money, Cars, UK News
Jess Battison