Martin Lewis issues warning to millions of drivers making DCA complaints
Martin Lewis has issued a warning to millions of motorists who have had a discretionary commission arrangement between 2007 and 2021 - and are looking to make a claim during Monday's Good Morning Britain.
Millions of drivers who bought cars on finance before 2021 could be in line for a payout over mis-sold car loans after the Financial Conduct Authority said it will consider a compensation scheme which could cost up to £18 billion.
It came after three motorists who bought their cars before 2021 hadn't been informed that the car dealers - who were acting as brokers for their line of credit - would receive commission from the lenders. It comes after Martin Lewis warns 'nothing to do with me' after complaints from money savers.
Speaking on GMB, Martin said: "Discretionary commission arrangement is were if you got a car finance deal on hire purchase or PCP after 2007 up until January 2021 when they were banned, then the car broker or dealer - the interest rate could be increased in order to increase the commission that they want."
Those who weren't told that - and many weren't - could be due a payback.
Martin revealed that the only way people could find out if they had a DCA is to put in a complaint. "Those who think they have paid too much for the finance should complain now," the regulator says. "We aim to make any scheme easy to participate in without needing to use a claims management company or law firm."
However, Martin then reiterated that using a Claims Management company or law firm may end up costing those 30% in fees of any compensation they receive.
"If you sign up to a claims management firm, you could get the money automatically but it'll want 30%."
Martin said drivers can do that themselves - or advised those to use his free tool on Money Supermarket to see if you have a DCA and to get a complaint logged.
Speaking on Good Morning Britain, Ed Balls said: "In short, what you're saying is if you've had in the last 15 years or so, any car you bought on some kind of hire purchase, put in a claim, you might get 100s of pounds?"
"Put in a request to find out if you've had a discretionary commission arrangement between 2007 and 2021, certainly.
"I need to manage some expectations here. The fact that you've had a discretionary commission arrangement means you'll likely be due money. But there are some factors that can throw wobbles in it. You might have had a 0% interest deal, in which case you're not due anything because there was no interest.
"So you can't get back the difference they've increased it to and the minimum interest because you weren't charged any at all. You might have had only a very small amount of interest.
"It isn't a slam dunk that everyone that had a DCA will automatically get 100s of pounds, some will, some won't. If you feel like you're in that category and it was unfair, you can put a complaint in now."
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