Martin Lewis says motorists who were mis-sold car finance are likely to receive “hundreds, not thousands of pounds” – with regulators launching a consultation on a new compensation scheme.
The founder of MoneySavingExpert.com believes it is “very likely” that about 40% of Britons who entered personal contact purchase or hire purchase agreements between 2007 and 2021 will be eligible for payouts.
“Discretionary commission arrangements” saw brokers and dealers charge higher levels of interest so they could receive more commission, without telling consumers.
Image: Pics: PA
Speaking to Sky News Radio’s Faye Rowlands, Lewis said: “Very rarely will it be thousands of pounds unless you have more than one car finance deal.
“So up to about a maximum of £950 per car finance deal where you are due compensation.”
Lewis explained that consumers who believe they may have been affected should check whether they had a discretionary commission arrangement by writing to their car finance company.
However, the personal finance guru warned against using a claims firm.
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“They’re hardly going to do anything for you and you might get the money paid to you automatically anyway, in which case you’re giving them 30% for nothing,” he added.
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Who’s eligible for payout after car finance scandal?
Yesterday, the Financial Conduct Authority said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.
The FCA’s statement added that those affected “should be appropriately compensated in an orderly, consistent and efficient way”.
Lewis told Sky News that the consultation will launch in October – and will take six weeks.
“We expect payouts to come in 2026, assuming this will happen and it’s very likely to happen,” he said.
“As for exactly how will work, it hasn’t decided yet. Firms will have to contact people, although there is an issue about them having destroyed some of the data for older claims.”
He believes claims will either be paid automatically – or affected consumers will need to opt in and apply to get compensation back.
The FCA says you may be affected if you bought a car under a finance scheme, including hire purchase agreements, before 28 January 2021.
Anyone who has already complained does not need to do anything.
The authority added: “Consumers concerned that they were not told about commission, and who think they may have paid too much for the finance, should complain now”.
Its website advises drivers to complain to their finance provider first.
If you’re unhappy with the response, you can then contact the Financial Ombudsman.
Any compensation scheme will be easy to participate in, without drivers needing to use a claims management company or law firm.
The FCA has warned motorists that doing so could end up costing you 30% of any compensation in fees.
The FCA estimates the cost of any scheme – including compensation and administrative costs – to be no lower than £9bn.
But in a video on X, Lewis said that millions of people are likely to be due a share of up to £18bn.
The regulator’s announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.
Zack Polanski and Nigel Farage might be polar opposites when it comes to politics – but they do have one thing in common.
The pair are both cutting through in a changing media landscape when attention is scarce and trust in mainstream politics is scarcer still.
For Farage, the Reform UK leader, momentum has been building since he won a seat at the general election last year and he continues to top the polls.
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Badenoch doesn’t want to talk about Farage
But in the six weeks since Polanski became leader of the Greens, membership has doubled, they’ve polled higher than ever before while three Labour councillors have defected. Has the insurgent firebrand finally met his match?
“I’m sure I don’t need to say this, but I despise Nigel Farage’s politics and disagree with him on almost everything,” Polanski tells Sky News.
“But I think his storytelling has undoubtedly cut through and so yes there has been a huge part of us saying ‘If Farage can do that with a politics of hate and division, then it’s time for the Green Party to do that with a politics of hope and community’ and that’s absolutely what I intend to keep doing.”
Polanski was speaking after a news conference to announce the defections of the councillors in Swindon – a bellwether area that is currently led by a Labour council and has two Labour MPs, but was previously controlled by the Tories.
It is the sort of story the party would previously have announced in a press release, but the self-described “eco populist” is determined to do things differently to grab attention.
He has done media interviews daily over the past few weeks, launched his own podcast and turbocharged the Greens social media content – producing slick viral videos such as his visit to Handsworth (the Birmingham neighbourhood where Robert Jenrick claimed he saw no white people).
Image: Zack Polanski announces the defection of Labour councillors
Polanski insists that it is not increased exposure in and of itself that is attracting people to his party but his messaging – he wants to “make hope normal again”.
“I’m not going to be in a wetsuit or be parachuting from a helicopter”, he says in a swipe at Lib Dem leader Ed Davey.
“I think you only need to do stunts if you don’t have something really clear to say and then you need to grab attention.
“I think when you look at the challenges facing this country right now if you talk about taxing wealth and not work, if you talk about the mass inequality in our society and you talk about your solidarity with people living in poverty, with working-class communities, I think these are the things that people both want to hear, but also they want to know our solutions. The good news is I’ve got loads of solutions and the party has loads of solutions. “
Some of those solutions have come under criticism – Reform UK have attacked his policy to legalise drugs and abolish private landlords.
Image: Discontent is fuelling the rise of challenger parties. Pic: PA
Polanski is confident he can win the fight. He says it helps that he talks “quite quickly because it means that I’m able to be bold but also have nuance”. And he is a London Assembly member not an MP, so he has time to be the party’s cheerleader rather than being bogged down with case work.
As for what’s next, the 42-year-old has alluded to conversations with Labour MPs about defections. He has not revealed who they are but today gave an idea of who he would welcome – naming Starmer critic Richard Burgon.
Like Burgon, Polanski believes Starmer “will be gone by May” and that the local elections for Labour “will be disastrous”.
He wants to replace Labour “right across England and Wales” when voters go to the polls, something Reform UK has also vowed to do.
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2:26
Is Zack Polanski squeezing the Labour vote?
Could the Greens be kingmakers?
Luke Tryl, director of More in Common, says this reflects a “new axis of competition” as frontline British politics shifts from a battle of left vs right to a battle of process vs anti-establishment.
Farage has been the beneficiary of this battle so far but Tryl says Polanski is “coming up in focus groups” in a way his predecessors didn’t. “He is cutting through”, the pollster says.
However, one big challenge Polanski faces is whether his rise will cause the left vote to fragment and make it easier for Farage to win – something he has said he wants to avoid at all costs.
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And yet, asked if he would form a coalition with Labour to keep Farage out of power in the event of a hung parliament, he suggested he would only do so if Sir Keir Starmer is no longer prime minister.
“I have issues with Keir Starmer as prime minister,” he says. “I think he had the trust of the public, but I would say that’s been broken over and over again. If we had a different Labour prime minister that would be a different conversation about where their values are.”
He adds: “I do think stopping Nigel Farage has to be a huge mission for any progressive in this country, but the biggest way we can stop Nigel Farage is by people joining the Green Party right now; creating a real alternative to this Labour government, where we say we don’t have to compromise on our values.
“If people wanted to vote for Nigel Farage, they’d vote for Nigel Farage. What does Keir Starmer think he’s doing by offering politics that are similar but watered down? That’s not going to appeal to anyone, and I think that’s why they’re sinking in the polls.”
A former paratrooper accused of murdering two civilians in the Bloody Sunday shootings in Northern Ireland 53 years ago has been found not guilty.
Soldier F – who cannot be identified for legal reasons – was accused of killing James Wray and William McKinney during disorder after a civil rights parade on 30 January 1972 in Londonderry, also known as Derry.
The veteran was also found not guilty of five attempted murders at Belfast Crown Court on Thursday.
He had denied all seven charges.
Thirteen people were shot dead by the Parachute Regiment on the day in question.
Soldier F did not give evidence, but the court heard about previous statements from two paratroopers – known as G and H – who were in Glenfada Park North along with F.
The prosecution said their testimony was direct evidence that the defendant had opened fire in the area.
Image: Bloody Sunday Trust undated handout photos of (top row, left to right) Patrick Doherty, Bernard McGuigan, John “Jackie” Duddy and Gerald Donaghey, (bottom row, left to right) Gerard McKinney, Jim Wray, William McKinney and John
However, the defence argued that they were unreliable witnesses as their statements were inconsistent with each other and with other witnesses who gave evidence.
The trial was held in Belfast in front of a judge, not a jury.
Delivering his judgment, Judge Patrick Lynch said the evidence presented against the veteran fell well short of what was needed for conviction.
This breaking news story is being updated and more details will be published shortly.