8:22 am, March 11, 2024
A tool set up by Martin Lewis to help consumers find out if they may have been mis-sold motor finance has received more than a million complaints since it launched last month.
Consumer champion Lewis unveiled the free reclaim tool and guide via his company MoneySavingExpert and customers have flocked to the service.
According to an article on the website, the tool has received a whopping 1.08m inquiries in its first month of being live.
The figure equates to an eye-watering 30,000 complaints per day, as the motor finance scandal continues to develop at a rapid rate.
Lewis estimates that, as more than a quarter of complaints came from people with more than one agreement, compensation could already be close to £500,000.
The news comes just weeks after Lloyds Banking Group put aside £450m to deal with the Financial Conduct Authority’s (FCA) investigation into motor finance.
The inquiry, which is expected to last until September, centres around now-banned ‘discretionary commission arrangements’, which allowed brokers and car dealers to make up interest rates to increase their commission.
The practice was outlawed in 2021 but tens of thousands of people could now be due compensation after overpaying.
The watchdog is using its powers under S166 of the Financial Services and Markets Act 2000 to identify cases of potential wrongdoing by motor finance firms.
Earlier this year, Lewis fronted a special ITV show in which he focused on ‘hidden and unfair’ car finance commissions.
Speaking today, the journalist said the response since then had been ‘off the charts’.
He said: ‘The numbers of complaints in not much more than a month is staggering – off the charts – far more than I expected.
‘So, it’s not surprising that some firms are struggling to respond to complaints in a decent time.
‘To frustrated complainers, I’d say for now we should be prepared to give companies some wriggle room on timings, but firms need to urgently step up their complaint-handling resources.
‘This is just the beginning. Even though we were at the vanguard of PPI and bank charge reclaiming, in terms of numbers of complaints, this feels like it is building up even more quickly.
‘In value terms, car finance mis-selling is potentially going to be the second biggest reclaim payout in UK history – possibly over £10bn repaid – which could even provide a fillip to the economy as PPI did.
‘Lloyds has already put aside a provision of £450,000,000 towards potential costs and payouts for this. A strong indication that it thinks it, and by inference others, will probably need to pay back money due to discretionary commission arrangements mis-selling. Though of course, we won’t know until the Financial Conduct Authority’s (FCA’s) ruling due in September.
‘It’s because we don’t know what the FCA will say in September that eligible people should look at logging a complaint sooner not later – as the unknown means there’s the risk people may be ineligible if they wait to claim.
‘The regulator’s own website information indicates timing may be an issue and says ‘so, if you think you could be running out of time, you should consider complaining to your provider now’.
Black Horse leads the way for complaints
As part of today’a announcement, MoneySavingExpert has provided a breakdown of which finance houses have received the most complaints.
Leading the way with 16.1% of the total is the Lloyds-owned Black Horse, ahead of Volkswagen Financial Services on 14.1%.
The likes of Stellantis Financial Services (8.4%), Santander (8.2%) and BMW Financial Services (7.4%) also featured highly on the list.
A full rundown can be seen below:
- Black Horse: 16.1%
- Volkswagen Financial Services: 14.1%
- Stellantis Financial Services: 8.4%
- Santander: 8.2%
- BMW Financial Services: 7.4%
- MotoNovo: 6.8%
- Mobilize: 4.3%
- Ford Credit Europe: 4.3%
- Mercedes-Benz Financial Services: 3.6%
- Barclays Partner Finance: 3.1%
- Alphera: 3.1%
- Toyota Financial Services: 2.5%
- Close Brothers: 2.4%
- Northridge: 2.4%
- Blue Motor Finance: 1.1%
Meanwhile, Advantage Finance, First Response Finance, Oodle, Moneybarn, Specialist Motor Finance, Billing Finance and Lombard Mallard have all denied ever using discretionary commission arrangements.
Dealers who are concerned about what the scandal could mean for them can view Lawgistics’ handy online guide.
You can watch the full ITV show here.
