MoneySavingExpert.com (MSE) website founder Martin Lewis in January shared that millions of drivers could be owed compensation payouts if they purchased a car, van or motorbike in the UK between 2007 and 2021.
Martin Lewis has shared the next steps after over 500,000 people filed subject access requests to lenders using Martin Lewis’ complaint process over potentially mis-sold car finance.
The MoneySavingExpert.com (MSE) website founder last month shared that millions of drivers could be owed compensation payouts if they had purchased a car, van or motorbike between 2007 and 2021. According to Martin, during this period “around 40%” of car finance deals contained so-called “discretionary commission arrangements”.
This allowed car dealers to adjust the interest offered to customers, to increase their commission – meaning drivers were often sold unfairly inflated prices. This practice has been banned since 2021, however, the Financial Conduct Authority (FCA) recently launched a misconduct investigation which could lead to compensation payments to those affected – potentially as high as £1100 per complainant or £234m overall.
Martin Lewis’ MSE team noted that the financial regulator likely has substantial evidence for mis-selling and therefore potentially a high chance of payouts when the report is published later this year. In the recent MSE newsletter, Martin had indicated that in just seven days, the public have sent over 530,000 complaints using the service, the first step of which is a ‘Subject Access Request’ levied at lenders. The challenge now for the lenders is to manage these time bound requests at scale and with accuracy.
The MSE tool allows individuals to make a complaint to a finance lender themselves rather than use a claims management firm. All a complainant must do is to answer a few questions regarding the details of the car finance arrangement, the tool would then build a ‘subject access request’ which is the first step in the process, this can then be sent to the finance provider to respond with the details that can be used as a basis of a complaint.
In the newsletter, Martin explained his “provisional thoughts” on the next steps to take although noted that it was “uncharted territory”. He wrote:
"We're monitoring how different firms respond (to these requests for information). We aim to launch a 'responses survey' next week, and then publish more detailed help once we know more."
The MSE newsletter explains that it is likely already that the finance lenders are swamped by the number of subject access requests so complainants may can expect a delay, but the lenders must work to a specific time limit.
Martin explained to complainants that if they were not told they had a “discretionary commission arrangement” then it’s likely they were not overcharged, and don’t need to pursue the claim further. The MSE newsletter also stated that if you complainants were told they had a “discretionary commission arrangement” but weren’t overcharged, then this is likely a tactic that is “designed to put people off” pursuing a complaint, however a subject access request is the appropriate way to obtain this vital detail to advance a complaint.
