Martin Lewis explains how millions could still get car finance payouts after Supreme Court ruling
The founder of Money Saving Expert said motorists with 'secret commission payments' could potentially be reimbursed by an automatic redress scheme by the end of the year.
It comes after the Supreme Court ruled that car finance lenders would only be liable for the hidden commission payments in the most 'unfair' cases.
'Nobody should be doing anything right now. You need to sit on your hands. 'People need to be patient. It is the sensible thing to do,' Mr Lewis said.
'While you may have a claim, we are potentially going to see the regulator put in an automatic redress scheme meaning you do not have to put in a claim to get your money.
'So if you were to sign up to a claim's firm on the back of this news, there is a chance you could get money paid to you, and the claim's firm could ask for 25 per cent of it even though it has done nothing.'
Mr Lewis said payouts could come by the end of the year, but people should 'wait to see' exactly what the Financial Conduct Authority redress scheme would be.
Two lenders, FirstRand Bank and Close Brothers, went to the UK's highest court to challenge a Court of Appeal ruling which found commission payments paid by buyers to car dealers as part of finance arrangements made before 2021 – without the motorist's fully informed consent – were unlawful.
The ruling in October last year found three motorists, who all bought their cars before 2021, should receive compensation after they were not told either clearly enough or at all that the car dealers, acting as credit brokers, would receive a commission from the lenders for introducing business to them.
Lawyers for the lenders told the Supreme Court at a three-day hearing in April the decision was an 'egregious error', while the Financial Conduct Authority intervened in the case and claimed the ruling 'goes too far'.
The three drivers, Marcus Johnson, Andrew Wrench and Amy Hopcraft, opposed the challenge.
Giving a summary of the Supreme Court's ruling on Friday, Lord Reed, one of five justices who heard the case, said: 'For the reasons set out in detail in a judgment published today, the Supreme Court allows the appeals brought by the finance companies.'
He continued: 'However, we uphold Mr Johnson's claim that the relationship between him and the finance company was unfair, and we allow the appeal in his case only because the Court of Appeal made a number of mistakes in reaching its decision. Retaking the decision on a proper basis, we award him the amount of a commission plus interest.'
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