Martin Lewis warns drivers who have had their car since before 2021
Martin Lewis has issued a warning to anyone who bought a car before 2021. The BBC Sounds and ITV star has said that a 'major investigation' from the Financial Conduct Authority (FCA) could hand 'billions' back to road users and motorists in the UK.
The Financial Conduct Authority (FCA) had been due to publish the outcome of its investigation into mis-selling in September 2024. The FCA is investigating car finance deals that contained so-called “discretionary commission arrangements” (DCA) which allowed car dealers to adjust the interest offered to customers, to increase their commission.
DCAs were banned by the regulator in January 2021 - but now the regulator is investigating whether compensation could be due. Mr Lewis has told drivers who bought their vehicle on Personal Contract Purchase (PCP) and Hire Purchase (HP) - but not leasing - to act "soon" to pocket the money. He said that the FCA will "likely" set up some type of mass-scale redress scheme next May.
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He added that a "time bar" may be introduced when the investigation is ove. MSE said: "In about 40 per cent of car finance deals, there were hidden 'discretionary commission arrangements' (DCA). This is where lenders allowed brokers & car dealers to up the interest to increase their commission – so you overpaid, without knowing."
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.
“If we find widespread misconduct, we will act to make sure people are compensated in an orderly, consistent and efficient way." You could end up being due compensation if your car finance had a DCA and you bought a car, van or motorbike for personal use before January 28, 2021. The types of finance covered in the investigation are personal contract purchases (PCP) and hire purchase - it does not include personal contract hire, which is often referred to as leasing.