11 March 2024 , 09:54
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Martin Lewis’ MoneySavingExpert.com has revealed how one million people have now submitted a car finance complaint after a major investigation was launched.
The Financial Conduct Authority (FCA) is investigating whether drivers are owed compensation for paying too much for car loans. The probe centres around so-called “discretionary commission arrangements” which allowed dealers to adjust the interest offered to customers, in order to increase their commission.
This practice was banned by the FCA in January 2021, but it is investigating whether motor finance firms may have unfairly rejected mis-selling claims. MSE subsequently set up an online tool to help consumers complain, and in an update today, revealed more than one million people have now used it. MSE estimates at least £480,000,000 could end up being paid out, or more, as over 25% of complaints are from people with multiple agreements.
Martin Lewis, founder of MSE, said: “The numbers of complaints in not much more than a month is staggering – off the charts – far more than I expected. So, it’s not surprising that some firms are struggling to respond to complaints in a decent time. To frustrated complainers, I’d say for now we should be prepared to give companies some wriggle room on timings, but firms need to urgently step up their complaint handling resources.
“And this is just the beginning. Even though we were at the vanguard of PPI and bank charge reclaiming, in terms of numbers of complaints, this feels like it is building up even more quickly. In value terms, car finance mis-selling is potentially going to be the second biggest reclaim payout in UK history – possibly over £10bn repaid – which could even provide a fillip to the economy as PPI did.”
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The investigation is looking into personal contract purchases and hire purchase, but not personal contract hire, also known as leasing. The FCA is currently scheduled to publish its findings on September 25, 2024.
Depending on the outcome, you could be owed money if you had a car, van, campervan or motorbike - but the vehicle had to be primarily for personal use, not for business use. Martin has urged people to log a complaint as soon as possible, in case a timeframe is later imposed by the FCA.