Martin Lewis has offered an update from the Court of Appeal over mis-sold car finance cases (Image: Getty)
has offered significant who think they were that could lead to a pay-out of more than £1,000.
The founder has spent several months making aware that they could have had a Discretionary Commission Agreement (DCA) that they were unaware of, causing them to overpay.
In , Martin Lewis highlighted that a new Court of Appeal ruling means that reclaims could be possible in the future, despite still being an uphill battle.
He said: “Three weeks ago, a landmark Court of Appeal ruling on a claims firm-led case sent shockwaves through the sector. It said ‘Consumers need to know all material facts including the amount of commission’.
“This opened the door to possible court reclaims for all car finance commission, and indeed can be read across to other lending areas. Yet it’ll almost certainly be appealed to the Supreme Court, which can and commonly does have an entirely different view and overrule it, so this is far from a done deal.”
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Drivers who financed a vehicle from April 2007 to January 2021 could have been affected (Image: Getty)
A DCA is the process in which a lender allows a dealer or broker to choose their own commission based on the that customers are required to pay.
Whilst the Financial Conduct Authority (FCA) banned the practice in January 2021, it is believed that many drivers who financed a vehicle from April 2007 until that date could have been overcharged, with various legal firms taking on manufacturers.
Currently, all manufacturers deny that they overcharged their customers who financed a car, with some stating that they will defend any claims that are made against them.
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Martin noted that, whilst it is agreed that DCAs were often unclear to consumers, it is up to drivers to prove their knowledge of commission.
He added: “The consumer wrongs of DCAs, with a lack of transparency about hidden cost increases and a restriction of consumer choice, are obvious. Yet mulling the Court of Appeal ruling, I find it more difficult to see the unfairness, or that redress is due, where car finance firms with fixed commission were following the regulator’s guidelines.
“If it is decided redress must be due if motor finance firms didn’t disclose commission, a fair test would be: was it hidden that there was commission and, most importantly, was the commission charged excessive?”
All car retailers deny claims that they overcharged customers who financed a model (Image: Getty)
Money Saving Expert currently offers a free guide to customers who believe they were previously mis-sold car finance, including a list of legal firms that are preparing to make joint claims.
If drivers feel that they have a genuine case, the financial advice website urges them to act as soon as possible, with the deadlines set by many legal firms approaching soon and Money Saving Expert highlighting that motorists will not be blacklisted for making a complaint.
Whilst the FCA has stated that drivers with a DCA paid an average of £1,100 more than average of a £10,000 four-year finance deal, it is currently too early to know if motorists will receive compensation.