The nation's trusted Money Saving Expert is back with an important warning for anyone who bought a car or a van before 2021.
While Martin Lewis continues to helped us navigate through the ongoing cost-of-living crisis, this time, he's here to warn us of the news that could affect millions of UK motorists.
The 51-year-old recently explained why motorists who purchased their a car or a van between 2007 and 2021 could be owed 'billions' in compensation.
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Those who purchased a vehicle with a PCP or a finance agreement could be affected, as drivers might be able to claim compensation due to the results of a Financial Conduct Authority (FCA) investigation.
The Financial Conduct Authority (FCA) announced that it would be launching an investigation following ‘more than 10,000’ reports to the independent complaints arbitrator, the Financial Ombudsman Service (FOS).
Sheldon Mills, executive director of consumers and competition at the FCA, said: “We are taking a closer look at historical discretionary commission arrangements in the motor finance market following a high number of complaints from customers, which are being rejected by firms.
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“If we find widespread misconduct, we will act to make sure people are compensated in an orderly, consistent and efficient way.”
The investigation has been launched amid concerns that those who bought their vehicle on motor finance may have been unfairly charged inflated prices for loans on new and secondhand vehicles.
Analysts at Jefferies calculated that the total costs for the industry could reach around £13 billion, according to the Financial Times.
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Lewis explained to the BBC: “What was happening at that point is the lenders who organised the finance were saying to the car dealers 'the commission is discretionary'.
“In other words, if you want more commission on these finance products - which is why they were being more heavily sold - you can simply increase the cost of the finance and you will get more commission.
“Many of them did so and it wasn't declared, so the consumer was not aware quite what enormous sums were being paid in commission to car dealers for this type of finance.”
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He went on to say that the FCA wouldn’t launch such an investigation if it was unlikely to find any wrongdoing, adding: "Clearly this means getting complaints in, if you were mis-sold, is going to be crucial.
"It should be noted, part of the announcement is the FCA has put a freeze on firms handling complaints for now, so if you complain now they don’t have to do anything, but my provisional thoughts are it is worth it for people who think they’ve been mis-sold getting in a complaint now as a marker.”
Topics: Money, UK News, Martin Lewis, Cars
Anish Vij