Money expert Martin Lewis is urging drivers to get their claims in as soon as possible after a landmark court ruling which could hand out £1,100 compensation payouts on average.
Martin has given update on the car finance misselling scandal which saw drivers who took out car finance loans or finance deals for buying cars hit with inflated interest rates because of hidden commissions which they weren’t informed about.
And now thanks to a court ruling, it’s looking increasingly likely that payouts will be handed to drivers – and there could be knock-on effects for the entire industry, not just car finance.
In January, the financial regulator, the Financial Conduct Authority (FCA), launched a huge investigation into car finance mis-selling on Discretionary Commission Arrangements on arranged loans or finance deals.
Martin Lewis via is MSE site said: “These DCAs are where finance firms let car dealers pump up interest rates, without customers being told, and then bunged ’em extra commission if they did.
“This meant many likely OVERPAID WITHOUT KNOWING and may be due an average £1,100 back.”
And on ITV’s The Martin Lewis Money Show Live this week, Martin set out just how much of an impact a new court ruling on the issue could have not just on drivers but on the entire consumer lending market.
The Court Of Appeal has now ruled that lenders cannot add ANY commission to deals without a customer’s ‘fully informed consent’ and unless the Supreme Court overturns the ruling, it could lead to major fallout.
As a result it’s even more important to check if you ever had car finance – even if you’ve since paid it off – because you might be owed compensation.
Martin Lewis says: “I cannot tell you how shocking this is. That so many of us that do this for a living are going ‘that ruling is…woah!.
“Outside car finance, this is seismic. This applies to all lending commissions. At the extreme, there are firms saying we might lend under these conditions.
“That’s not happening, I don’t want to scaremonger or go too far but that’s quite the level of size this is.
“So what we really need, we need the Supreme Court if it’s going to overturn it to do it quickly, we need the regulator and the government to make sure that there is stability in the consumer lending market, because…this is so big.
“But for specifically car finance this is substantially increasing the likelihood that the FCA when it rules will rule that you are due a payout if you have a DCA so get your claims in.”
Martin Lewis then said when you put your claim in for a Discretionary Commission Arrangement, you will get one of three replies: a confirmation that you had one, a confirmation that you didn’t have one, or that they don’t reply.
If they don’t reply, get back in touch and make sure they have registered your complaint.