Martin Lewis A major update in Landmark Car Finance Miss-Saling Case It can see that millions of drivers paid adequate compensation.
The Financial Conduct Authority (FCA) has confirmed that it is starting a consultation on a compensation scheme that it says Cost Finance lender £ 18 billion.
A Supreme Court On Friday (August 1), it was found in the judgment that the lender car is not responsible for the payment of the commission hidden in the finance schemes, a decision that means that most of the claims will not proceed, but only the most serious claims will be. Eligible for compensation.
But in a separate strand of the car finance miss-celling case, many cases which were not part of the Supreme Court’s decision, are still likely to receive payment.
The FCA is now urging those who believe that they can be affected and have not already complained about doing so. Mr. Lewis has Launched a device through him Money savings expert Service To help people do so.
Both he and the financial regulator are also warning people against signing a claim to the management company to support their complaint at this stage. This is because the prevention plan will be automated and lenders will need to come in contact with the affected people directly.
If this happens, an agreement has already been made with a claim firm, then the person may have to pay up to 30 percent of their compensation, despite that the firm does not need to do any work.
Here you need to know about the situation:
Am I eligible for Car Finance 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.
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”.
