Martin Lewis has strongly urged anyone who believes they were mis-sold car finance to submit a complaint without delay, warning that compensation is distributed on a first-come, first-served basis. Appearing on ITV's This Morning, the financial expert explained that those who complain will be paid first, and that relying on firms to identify affected customers may not work due to data retention limits and address changes.
Why Complain Now?
Mr Lewis stated: "I would very strongly suggest anyone who thinks they were mis-sold motor vehicle finance puts a complaint in. And there are two reasons for this. Literally, in the structure of payouts, those who've complained get paid first. The whole way it's operated is if you put a complaint in and you've been mis-sold, you will get paid first."
He added: "But a far bigger issue is we're talking complaints going back to 2007. Now, legitimately under data protection, lots of firms rip up your old information because they're not allowed to keep it. So they can only identify people that they can identify and you also may have moved house four times. So, if you're relying on them finding you, while they must do their best endeavours, that doesn't mean they will."
The Motor Finance Scandal
The controversy involves 12 million agreements for cars, vans, or motorbikes bought through Personal Contract Purchase (PCP) or Hire Purchase between April 6, 2007 and November 1, 2024. Many consumers were affected by discretionary commissions that artificially inflated financing costs. The Financial Conduct Authority (FCA) has established a mass redress scheme with an estimated £9.1 billion earmarked for compensation.
Legal Challenges and Delays
On July 2, it emerged that the FCA had been compelled to halt payouts due to legal challenges from four firms opposing its proposals. The UK's Upper Tribunal has agreed to hear these challenges in December or February next year, with a judgment expected in the following months. This could cause substantial delays to any payouts.
Despite the delays, financial firms are required to track down those mis-sold packages, meaning affected customers should receive payment regardless of whether they lodge a complaint. Compensation is also applicable even if the individual has since passed away. The average payout, previously estimated at £700, has now risen to £830.
How to Find Your Car Finance Details
Mr Lewis advised viewers on how to locate their car finance details, encouraging them to submit a free complaint to ensure firms have their correct contact information. He stressed: "If you know your car finance details, or I can tell you how to find them in a moment anyway. And you put a complaint in, then one, you know they've got your information and two, you know they know how to contact you. So for both of those reasons, I would strongly urge people to put in a free complaint."
