Martin Lewis has issued a 'very strong suggestion' to anyone pursuing a car finance mis-selling claim, urging them to act without delay. Appearing on This Morning, the money-saving expert emphasized that time is of the essence because compensation is being paid on a first-come, first-served basis, and older claims—some dating back to 2007—may be difficult to process if firms lack updated contact details or have destroyed records under data protection rules.
Why Acting Now Matters
Lewis explained that the structure of payouts means those who complain first get paid first. 'Literally, in the structure of payouts, those who've complained get paid first,' he said. He also highlighted a 'far bigger issue': complaints going back to 2007, where firms may have destroyed old information and claimants may have moved multiple times. 'If you're relying on them finding you, while they must do their best endeavours, that doesn't mean they will,' Lewis warned.
The car finance scandal affects around 12 million agreements for cars, vans, or motorbikes bought on Personal Contract Purchase (PCP) or Hire Purchase between April 6, 2007, and November 1, 2024. Many consumers were hit by discretionary commissions that inflated financing costs.
FCA Redress Scheme and Legal Challenges
On July 2, the Financial Conduct Authority (FCA) paused payouts on its mass redress scheme, which was set to distribute an estimated £9.1 billion. Firms are obligated to search for affected customers, even if they haven't filed a complaint, and compensation applies to deceased individuals as well. The average payout has risen from an earlier estimate of £700 to £830.
However, the FCA faces legal challenges from four companies unhappy with the plans. The UK's Upper Tribunal will hear these challenges in December or February next year, with a judgment expected in the following months, potentially causing lengthy delays.
Lewis's Advice for Claimants
Lewis urged viewers to file a free complaint if they suspect they were mis-sold. 'If you know your car finance details, or I can tell you how to find them... and you put a complaint in, then one, you know they've got your information and two, you know they know how to contact you,' he said. He reiterated that while firms must do their best to find affected customers, relying on them is risky.
