Financial expert Martin Lewis Drivers who were advised on the next stages Incorrect-sell car loanSaid after a financial regulator Industry can pay up to £ 18bn In compensation.
Financial conduct authority A compensation is starting consultation, which will determine how much is paid to millions of people, who paid more interest than what they knew.
A Supreme court governance On Friday (August 1), it was found that the lender car is not responsible for the payment of the commission hidden in finance plans, a decision that means that most claims would not proceed, but only the most serious claims will be eligible for compensation.
But in a separate strand of the car Finance Miss-Sailing case, many cases which were not part of the Supreme Court verdict, are still likely to receive payment, Mr. Lewis explained.
Am I eligible for compensation scheme?
Mr. Lewis explains that the car is the “two strand” in the wrong -selling case of finance. The discretionary commission’s system (DCAS), which Mr. Lewis says that compensation would be mainly for coming out in consultation, he was not involved in the Supreme Court case, he said.
“Most of the people have complained that the Supreme Court’s decision was not involved, although it was just happening in the case when anything happened in the decision that produced a vabler for DCAS,” said Mr. Lewis.
DCAS was banned in January 2021, so any person is likely to unknowingly agree with individual contract procurement (PCP) or rent purchases (HP) deals.
“This happens when you went to a car broker or dealer and increased the amount of interest that were charged to increase the amount of commission without telling you,” Mr. Lewis explained.
Those who had PCP or HP deals are “the possibility of getting compensation under the scheme”.
But Mr. Lewis noted that those who had 0 percent interest, or whose commissions were very low, are unlikely to get compensation. But he says that for most people, compensation will be in hundreds of pounds.
The second strand of the wrong -selling case is an element of the Supreme Court case that was retained by the court – the other two were rejected.
This refers to the commission that was “clearly inappropriate”, Mr. Lewis explained, saying that it is difficult to define because it was done on the basis of case-by-case. Payment factors may also include how weak you are – and whether it is more unfair to the Commission that it is so high.
As this case-by-case is done and it is not a blanket issue like DCA cases, it is not clear how compensation scheme will work for these, Mr. Lewis said.
What should I do now?
For those who are uncertain whether they are eligible, Mr. Lewis recommends to put in a complaint whether you had DCA.
“If you are one of those who already have a letter, stating that your car finance firm, after your complaint, will deal with it by December this year, then there will be almost certainly delay till next year,” he said.
The FCA is advising consumers who believe that they should pay a lot, now complain, and should be advised against the use of claims management firms (CMC) or law firms, which can cost up to 30 percent of any compensation fees.
Lenders have to contact customers, and either automatically pay consumers or choose a scheme for compensation to consumers, which means that receiving compensation “will be very simple”, Mr. Lewis explained. Therefore, CMC and Law firms can take 30 percent compensation without any work.
Mr. Lewis’s money advice website Moneysavingexpert provides a free equipment that will complain a template for you for DCAS.
How much compensation can I be given?
The FCA estimates that most of the claims will receive “less than £ 950 in compensation per agreement”.
The final cost of the compensation plan will depend on the final design that takes it, the FCA added to its statement today. The first payment is predicted in 2026.
For DCA cases, the maximum you can receive is for all commissions you paid, Mr. Lewis said. It is more likely that you will be paid a high interest rate that was at least above the standard interest rate by you.
A simple interest – meaning that interest is calculated on the original amount of the loan – about 3 percent per year will be added to the top of the payment, Mr. Lewis said.
He said, “There is a lot of possibility that many people who had a discretionary commission system, where they were accused of more interest, would get a part of that in hundreds of pounds in a few points in 2026,” he said.
But the expert warned that the industry would “fight this hard”, before he urges the members of the industry to accept the “fair agreement”.
