Money saving guru Martin Lewis has issued an urgent alert to millions of British drivers who used car finance agreements, revealing they could be entitled to significant compensation payouts.
The Multi-Billion Pound Car Finance Scandal
The Financial Conduct Authority (FCA) has launched a major investigation into discretionary commission arrangements that were banned in 2021. These arrangements allowed car dealers and lenders to secretly increase interest rates to boost their own commissions.
Who Could Be Owed Money?
If you arranged car finance through these key providers, you might have a claim:
- Black Horse
- Santander
- Marks & Spencer Bank
- Lloyds Bank
- Bank of Scotland
- Halifax
This affects an estimated 40% of all car finance agreements taken out before the 2021 ban, potentially impacting millions of drivers across the UK.
How Much Could You Claim?
While individual payouts will vary, some early claimants have already received substantial amounts:
- Typical compensation ranges from £1,000 to £5,000
- Some claimants receiving over £10,000
- Total industry compensation could reach £16 billion
What You Need to Do Now
Martin Lewis advises taking these immediate steps:
- Gather your paperwork - Find your car finance agreement documents
- Check the dates - Agreements must be from before January 28, 2021
- Submit your complaint - Contact your lender directly first
- Don't pay upfront fees - Use free template letters from MoneySavingExpert
Important Deadlines and Time Limits
The FCA has paused the usual 8-week response time for complaints until September 25, 2024, giving lenders more time to handle the expected flood of claims. However, you should still submit your complaint as soon as possible to secure your place in the queue.
This could be one of the biggest financial mis-selling scandals since PPI, with Martin Lewis describing it as potentially even larger than the banking compensation scheme that paid out £38 billion.
Drivers are urged to act now rather than waiting for the final FCA decision, as there's nothing to lose by submitting a complaint and potentially thousands to gain.
