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Money expert Martin Lewis has hit the headlines again claiming that the Financial Conduct Authority (FCA) review of motor finance could see a doubling of claims.
The FCA announced yesterday that it was consulting on giving finance houses more time to deal with commission complaints following a Court of Appeal ruling
In Hopcraft, Johnson and Wrench, the Court of Appeal decided it was unlawful for car dealers to receive a commission from the lender providing motor finance without obtaining the customer’s informed consent to the payment.
This required the consumer to be told all material facts, including the amount of the commission and how it was to be calculated.
The judgment related to fixed commission in motor finance agreements as well as discretionary commission arrangements (DCAs), which were banned by the FCA in 2021.
Lewis said potentially the amount of claims could double but he said it was early days and he needed to probe further.
“It looks like (I need to dig) if the hold is extended, almost everyone who has had car finance deals may have a complaint (I need to examine timelines of what counts) and be potentially due money back (this includes those already rejected as they were told they ‘didn’t have a DCA’).
“This potentially more than doubles the number of people involved, and would really start to look more like PPI scale of payouts (and a substantial threat to the car finance industry),” he said.