Money Blog: ‘Big news’ as ‘almost everyone’ who bought car finance could soon get a possible refund | Money news

Thousands more drivers who took out car finance could get a refund after the regulator announced “big news” today, according to consumer advocate Martin Lewis.

The Financial Conduct Authority says it is planning a consultation on extending the time companies have to deal with Motor Finance Commission complaints.

Lewis says this will apply to all vehicle finance commission complaints and not just the discretionary commission arrangements (DCAs) complaints previously covered.

This could mean that “almost everyone” who has taken out car finance deals will have to file a complaint and “potentially seek money back”.

“This potentially doubles the number of people involved and would look more like a PPI payout scale (and pose a significant threat to the car finance industry),” he said on X.

The Court of Appeal recently ruled in favor of three motorists who were not informed that a 25% commission was paid to the car dealers with whom they had car finance agreements, which was then added to their bills.

The ruling said it was unlawful for car dealers to receive a commission from lenders without obtaining the customer’s informed consent to pay.

Lewis says this “signals that the FCA is laying the groundwork for a future expansion of the scope of its car finance investigation, not just into 40% of previous claims that DCAs had (where dealers could increase their commission by increasing interest rates), but for all “commissions including fixed commissions”.

The ruling related to fixed commissions in car finance contracts as well as DCAs (agreements that give brokers the ability to adjust the interest rates offered to customers), which were banned by the FCA in 2021.

The FCA proposals are expected to be published within two weeks. If they go ahead (Lewis says this is a “done deal” as it is a short consultation period), the appeal extension would come into effect until the middle of next month.

We covered the car finance scandal in our article, including how much compensation claimants are entitled to and how motorists can lodge a complaint Basically… Series: