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Martin Lewis says motorists who were mis-sold car finance are likely to receive “hundreds, not thousands of pounds” – with regulators launching a consultation on a new compensation scheme.
The founder of MoneySavingExpert.com believes it is “very likely” that about 40% of Britons who entered personal contact purchase or hire purchase agreements between 2007 and 2021 will be eligible for payouts.
“Discretionary commission arrangements” saw brokers and dealers charge higher levels of interest so they could receive more commission, without telling consumers.
Speaking to Sky News Radio’s Faye Rowlands, Lewis said: “Very rarely will it be thousands of pounds unless you have more than one car finance deal.
“So up to about a maximum of £950 per car finance deal where you are due compensation.”
Lewis explained that consumers who believe they may have been affected should check whether they had a discretionary commission arrangement by writing to their car finance company.
However, the personal finance guru warned against using a claims firm.
“They’re hardly going to do anything for you and you might get the money paid to you automatically anyway, in which case you’re giving them 30% for nothing,” he added.
Read more: How to tell if you’ve been mis-sold car finance
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Who’s eligible for payout after car finance scandal?
Yesterday, the Financial Conduct Authority said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.
The FCA’s…
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