Martin Lewis has issued a warning for anyone who bought a car or van before 2021.
The consumer champion and Money Saving Expert routinely shares tips and tricks to his followers on how to save a few quid - such as checking if you or your kid has any money stashed away in a Child Trust Fund or the best time to renew your car insurance.
And yesterday, he shared news that could affect millions of UK motorists who bought their vehicle before 2021, and lead to payouts that could ‘possibly’ be worth ‘thousands for many’.
Advert
Lewis even went on to say that it ‘could be PPI type scale’, which ended up with payouts of around £40 billion.
The Financial Conduct Authority (FCA) announced that it would be launching an investigation following ‘more than 10,000’ reports to the independent complaints arbitrator, the Financial Ombudsman Service (FOS).
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.”
The investigation has been launched amid concerns that those who bought their vehicle on motor finance may have been unfairly charged inflated prices for loans on new and secondhand vehicles.
In January 2021, the FCA changed the law so that firms could no longer receive commissions linked to the interest rate that the customer paid. The ban was brought in following concerns that it gave brokers and dealers an incentive to increase people’s costs.
However, as the rule was only introduced at the beginning of 2021, it means that there’s potentially millions of people who could be set for a pay out.
In a post on X, Lewis said: "HUGE announcement from @theFCA this morning that has gone totally under the radar. It may mean a payout for millions who bought a car/van on motor finance before 2021."
He went on to say that the FCA wouldn’t launch such an investigation if it was unlikely to find any wrongdoing.
Lewis also warned anyone who thinks they may be affected to get a complaint in now, adding: "Clearly this means getting complaints in, if you were mis-sold, is going to be crucial.
"It should be noted, part of the announcement is the FCA has put a freeze on firms handling complaints for now, so if you complain now they don’t have to do anything, but my provisional thoughts are it is worth it for people who think they’ve been mis-sold getting in a complaint now as a marker.”
Topics: Martin Lewis, Money, UK News, Cars
Claire Reid