Martin Lewis issues major car finance scandal update and is 'concerned'

Martin Lewis has issued a major update to drivers over a battle for compensation payouts over the ongoing car finance scandal investigation. The BBC and ITV star has dedicated a section in his Money Saving Expert weekly newsletter to the legal fight.

MSE founder Mr Lewis said: "In January, regulator the Financial Conduct Authority (FCA) launched its final stage investigation into car finance hidden Discretionary Commission Arrangements (DCAs) mis-selling. This is the 40% of cases where dealers could up the interest and thus consumers' costs to get paid more commission - without consumers knowing.

"No surprise we've had 2.5m complaints via our free car finance DCA complaints tool." He said: "Now, after a Court of Appeal ruling a few weeks ago, the FCA's just announced a consultation on effectively paving the way to extend the scope to ALL deals that had commission on them, not just DCAs, doubling the number of potential complainants (though I have some concerns over this)."

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Martin warned the latest ruling may prove "counterproductive", saying: "I've explained the practicals above, but wanted to add a final thought. The consumer wrongs of DCAs, with a lack of transparency about hidden cost increases and a restriction of consumer choice, are obvious.

"Yet mulling the Court of Appeal ruling, I find it more difficult to see the unfairness, or that redress is due, where car finance firms with fixed commission were following the regulator's guidelines. If it is decided redress must be due if motor finance firms didn't disclose commission, a fair test would be: was it hidden that there was commission and, most importantly, was the commission charged excessive?"

Mr Lewis said: "If not, it feels a push - even for me - that we move to a model of car finance reclaims where any commission if the amount wasn't known was unfair and should all be repaid."