Martin Lewis has called on more Britons to use a new tool to see if they are owed compensation from a car finance issue raised by the financial regulator.
The Financial Conduct Authority (FCA) has launched an investigation into motor finance and whether drivers were overcharged on their loans before 2021.
The main issue stemmed from the discretionary commission arrangement which saw some car dealers adjusting interest rates offered to customers.
Although it was banned in 2021, the FCA has received a number of complaints of drivers being overcharged, resulting in the investigation.
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Martin Lewis has urged drivers to check if they are eligible
To help drivers deal with the issue, Martin Lewis launched a new tool allowing drivers to check if they are affected and could receive compensation for their car finance.
The tool was launched at 7.30pm on Tuesday, February 6, and within 24 hours, a staggering 262,500 people had already sent off their complaint emails.
The money saving expert said: “These are staggering numbers, bigger even than the final days in the run up to the PPI deadline.
“To put it in context, of the 262,500 complaint emails that have been sent via our free tool, it’s estimated 40 per cent of those will have had the hidden discretionary commission arrangements on them.
“The typical overcharge – which is likely to be paid back once the FCA reports in September – is £1,100 per agreement. So that would mean a conservative predicted payout of £115,000,000 – conservative as many of the emails cover two, three or four agreements with the same firm.”
He added that he was expecting 50,000 people to use the tool on the first day – a number that he admits is still “huge”.
The tool asks drivers about their motor finance agreement namely if they had more than one finance agreement and which company was the provider.
Martin Lewis said: “This is off the charts and means this reclaim campaign is likely to be bigger than bank charges, and second only to PPI in scale with many billions potentially to be paid out.
“I’d urge anyone who got a car, van, campervan or motorbike on finance before 28 January 2021 to check and get their complaint in soon – the sooner you do it, the less risk of being timed out later.”
The Money Saving Expert website outlines that drivers shouldn’t expect anything to happen quickly given that the FCA investigation won’t end until September 25, 2024, although this may be extended.
Martin Lewis has previously said the average payout for drivers affected by the car finance issue would likely be “over a grand”.
Complaints to the financial ombudsman normally need to be made within six months of getting a final response from their provider.
Martin Lewis suggested that the average payout could be over £1,000
As part of the investigation, the FCA is extending the deadline to 15 months if they have been or will be sent a final response between July 12, 2023, and November 20, 2024.