Martin Lewis has confirmed when compensation payouts will be handed to drivers affected by the car finance misselling scandal. The Money Saving Expert revealed the timeline during a recent episode of The Martin Lewis Money Show Live on ITV1, which returned on October 14 with an update on the long-awaited redress scheme.
Court date set for legal challenge
Lewis told viewers that a court date has now been announced for a legal challenge from four firms that had put the scheme on hold just as mass payouts were about to begin. The companies had a choice between December and February, and they have chosen February, which will delay the process further.
“Everyone’s been waiting for this and the news came out today. This is about the FCA mass redress scheme for car finance misselling. We now have a court date announced for the legal challenge from four different firms who put this on hold just as it was about to start doing mass payouts,” Lewis said.
Payout details and figures
The Financial Conduct Authority (FCA) has already confirmed the details of payments to drivers who were missold finance deals. The average payout will be about £829 per driver per deal, covering a total of 12.1 million finance deals. The final scheme means around two million fewer deals will be eligible for compensation than under previous proposals.
The regulator expects the total amount of redress paid under its scheme to be about £7.5 billion, lower than the previous £8.2 billion estimate, and based on about 75% of eligible consumers making a claim. Motorists are expected to receive a higher payout than the £700 estimated under earlier FCA proposals.
Scam warning for drivers
Lewis also repeated a warning about scammers targeting drivers who have already logged a claim and are waiting to hear back. He had previously cautioned in March that “vultures circling” would try to cash in on the payouts.
“Now there is clearly something we need to worry about here. You hear I’ve said to people ‘you will be contacted’, whenever I say, ‘you will be contacted’, there are some nasty evil people out there who just have a light bulb that goes ‘opportunity’,” he told his ITV1 audience.
“So the most important thing at this point I need to tell you is this: beware scammers. Scammers are going to latch on and leech on the back of this. I’ve already been talking with the regulator about it, they are going to announce on Monday what they’re doing to prevent scammers and there’s quite a few things they can do.”
Lewis added: “But most importantly for you, if you’re being contacted out of the blue, be very very careful unless you think it’s legit… But just don’t get too excited, make sure it’s real please.”
Firms must process complaints now, but they need not pay out until after the legal challenge is resolved, meaning payments remain on hold for the time being.
