Martin Lewis has issued a warning to anyone making a claim over mis-sold car finance, cautioning that some claims management companies (CMCs) could take up to a third of their compensation. In a video released on social media, the consumer champion 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 knowledge and then demanded a fee to close the case.
The warning comes as the Financial Conduct Authority (FCA) cracks down on misleading adverts by CMCs. The regulator said it had identified a growing number of promotions that appear to offer independent advice but are actually paid advertisements from CMCs and law firms. The FCA has launched a template letter for consumers who feel they have been misled.
The car finance mis-selling scandal affects around 12 million vehicles, with a £9.1 billion refund scheme established. Lewis explained that many people may have inadvertently signed up to a CMC by filling out an online form while scrolling social media, not realising that this counted as instructing the firm to act on their behalf. He described this practice as unacceptable.
Consumers can complain directly to their lender or use free tools, such as the one on the MoneySavingExpert website. However, some CMCs charge more than 30% of the compensation if successful. The FCA has given firms until the end of June 2026 to handle complaints for loans taken out from 1 April 2014, and until August 2026 for earlier loans.
The FCA has already secured an agreement from one firm to remove all its adverts and warned that further action will be taken to prevent consumers from being duped. Firms must remove misleading content and ensure that any consumers misled into signing up are properly informed.
