Martin Lewis has warned that people making claims over mis-sold car finance could lose around one third of their compensation to claims management companies (CMCs). In a video released on social media, the money-saving expert highlighted the issue after receiving an email from a listener named Nikki, who discovered a company had filed a claim on her behalf without her permission and then demanded a fee to close the case.
The warning comes as the Financial Conduct Authority (FCA) cracks down on misleading adverts by some CMCs. The regulator said it had identified a growing number of adverts that appear to offer independent advice but are actually paid promotions from CMCs and law firms. One firm has already agreed to remove all its adverts following FCA action.
Mr Lewis explained that many people may have inadvertently signed up to a CMC by filling in an online form while scrolling social media, without realising it counted as instructing the firm. He said: 'What you may not have realised is some of those firms actually count that as signing up to their services and then they say, 'We're now acting for you and we want 30% if you got everything'. Well, that simply isn't acceptable.'
The car finance mis-selling scandal affects around 12 million vehicles, with a £9.1 billion refund scheme established. Claims are eligible if the driver was not told about a discretionary commission arrangement, a high commission of at least 39% of the total cost of credit, or a right of first refusal. Firms have until June 2026 to handle complaints for loans taken out from April 2014, and until August 2026 for earlier loans.
People can complain directly to their lender or use free tools such as the one on the MoneySavingExpert website. The FCA has launched a template letter for those who feel misled by their CMC, and has warned that firms must remove any content that misleads consumers and prevents informed decisions.
