A new motor finance reclaim tool promoted by consumer champion Martin Lewis sees a record-breaking number of complaints in its first 24 hours, signalling widespread consumer action against potential overcharging in the car finance sector.
In the UK, a free motor finance reclaim tool introduced by consumer advocate Martin Lewis has received an unprecedented response with more than 250,000 complaint emails being sent within a day of its launch. This surge in consumer engagement, as tweeted by Lewis, exceeded the volume observed during the final days of the Payment Protection Insurance (PPI) compensation deadline.
The online tool, hosted on MoneySavingExpert.com, was created following a thorough investigation by the Financial Conduct Authority (FCA) into the potential overcharging of customers for car finance loans. This investigation delved into the use of historical discretionary commission models, which allowed brokers to increase interest rates to earn higher commissions. Such commission models were outlawed in January 2021.
Leveraging the tool and guide, Lewis, who is also a familiar face on ITV’s Good Morning Britain, has advocated for individuals who had car, van, motorbike, or campervan finance agreements in place before January 28, 2021, to verify potential mis-selling and to pursue claims. Although financial providers have largely been rejecting these complaints, claiming that no unjust actions occurred, the FCA has demonstrated a commitment to investigate and uphold consumer rights.
For now, the FCA has suspended the deadline for car finance firms to address customer claims, allowing consumers more time to seek redress. While the FCA is expected to communicate further developments in the third quarter of 2024, affected customers may still file complaints, albeit without an immediate response from providers until September 25, at the earliest.
The impressive uptake of the reclaim tool is indicative of widespread consumer concerns regarding the car finance market and the importance of financial justice. The FCA’s forthcoming decisions will be closely monitored by many individuals awaiting resolutions to their complaints. For those seeking to initiate a car finance complaint, additional information can be found on the FCA’s official website.
