FCA Motor Finance: Martin Lewis car insurance money saving advice, how to make a claim - how much could I get
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Money saving expert Martin Lewis has said he thinks a "huge" announcement from the Financial Conduct Authority (FCA) could mean a pay-out for millions on a similar scale to the PPI scandal.
PPI saw billions of pounds paid out in compensation to consumers who had been wrongly sold Payment Protection Insurance, a type of insurance that people could buy to cover loan or credit card payments in case they couldn't make them.
Now, Lewis says those who bought a car or van on Motor Finance before 2021 could be in line for similar compensation. Here is everything you need to know.
What has Martin Lewis said?
Lewis took to X to say that he'd "done back of the envelope numbers" to work out just how much consumers could be in line for in compensation payouts.
"At the top end this," he said, "could be PPI type scale (that was £40bn), big enough to be a form of Quantitative easing (so real consequences for the next govt as it’ll likely take a year)."
It's all down to the FCA's announcement that it is to look at the handling of complaints about commissions when people took out Motor Finance to afford buying a car or van without paying the full amount upfront, pre-2021.
Lewis said: "Two big Ombudsman cases revealed today indicate that firms are falsely rejecting complaints and the FCA is now to do a full review of complaint handling.
"The FCA wouldn’t do this unless it was likely to find they were doing it wrong. So my suspicion is when it finishes its investigation it will (in order of likelihood) set up either:
- a) A redress scheme where it orders all the firms to pay redress to every affected customer even if they've not complained.
- b) Redress rules where it orders them to pay out redress based on a set formula, to those that complain.
How much could I get back?
If Lewis' calculations and predictions are correct, he thinks the potential pay out could be "huge".
"The pay out would be either the interest on loans (which is big), the commission (which is big), or the whole loan (which is huge)," he said. "We're possibly talking thousands back for many."
What do I need to do?
"Clearly this means getting complaints in if you were mis-sold is going to be crucial especially if they choose scheme b) and there is a cut off involved," Lewis said.
"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 people who think they’ve been mis-sold getting in a complaint now as a marker.
Lewis said he and his team will be working on a full guide to the situation, which they hope to have available "in the next couple of weeks", to talk you through the process step-by-step.
For more information, including on how to make a complaint, head to fca.org.uk/carfinance