Martin Lewis Calls for Action on Car Finance Compensation Claims

Motorists who may have been mis-sold car finance are being urged to take immediate action, according to financial expert Martin Lewis. He is encouraging drivers to check their eligibility for compensation following a ruling by the Financial Conduct Authority (FCA) that found numerous motor finance firms had violated regulations. These breaches involved failing to adequately inform customers about commissions paid by lenders to car dealers.

Under a newly established redress scheme, individuals who purchased vehicles through hire purchase or personal contract purchase agreements between April 2007 and November 2024 may be entitled to compensation. The FCA estimates that the average payout could reach around £700 per agreement, potentially leading to a total compensation bill of £8.2 billion for lenders.

A staggering four million car finance deals have already led to complaints, with an additional ten million agreements still eligible for claims. To facilitate the claims process, Lewis has introduced a new tool on his Money Saving Expert (MSE) website. This tool allows individuals to submit what he describes as a “DIY complaint,” streamlining the process for those who believe they are owed compensation.

Lewis emphasizes the importance of acting promptly. “If you’ve not complained yet, while you needn’t do anything, it’s generally best to submit a DIY complaint now,” he stated. He explained that although firms will eventually attempt to contact all individuals who were mis-sold products, there is a significant risk that those with older agreements or those who have changed addresses or names may not receive notification.

For those who utilize the new MSE tool, the compensation process will be expedited, potentially allowing for payments to be processed up to eight months sooner. “Once you’ve complained, if you were mis-sold, they must contact you to confirm that the process is underway and give you the right to opt out,” Lewis added. He also mentioned that this approach was supported by the FCA in a recent discussion.

In light of this situation, the FCA has warned the public to be vigilant against scams. Fraudsters are reportedly posing as representatives of the FCA or car finance lenders, attempting to obtain personal information such as names, addresses, dates of birth, and bank details. The authority cautioned that these scammers falsely claim that individuals are owed compensation.

With millions potentially eligible for compensation, Lewis continues to advocate for consumers to take the necessary steps to secure their rights. By utilizing the resources available through the MSE site, individuals can ensure they are not missing out on what may be significant financial redress.