Any compensation payout will be made automatically, but the consumer champion urged people to ‘get ahead of the queue’.
The Martin Lewis Money Show Live returned to TV screens on Tuesday for an hour-long summer special where the consumer champion shared an update for millions of people waiting to hear if they are due a compensation payout of around £1,100 for hidden Discretionary Commission Arrangements (DCAs).
The consumer champion told STV viewers how the Supreme Court is deliberating over an appeal it heard in April and an outcome is likely around July. He was asked if it was still worthwhile putting in a claim as the Financial Conduct Authority (FCA) has previously said any compensation would be automatic.
But the financial guru advised it was a good idea to make a climax now so that all the administrative work is in place before any ruling is announced, though he also said it was fine to wait until the decision is made. He did, however, urge people to use a free online claims service – there’s one on MoneySavingExpert.com here.
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Lisa contacted the programme and asked: “It would be great to get an update on car finance, I believe I could be eligible due to having cars on DCAs but never got round to putting my claim in. I have now read that if you are due any payout, you will be contacted and repaid automatically, without filling anything in. Is this right?”
Martin responded: “Yes, basically around 2.5 million people have put DCA claims in. Discretionary Commission Arrangements, that’s effectively where car dealers charge higher interest than they needed to and they got more commission for doing so and the regulator (FCA) is investigating that.
“The most important thing to understand is car finance claims are currently on hold because the Supreme Court is looking at a case right now, it’s already heard evidence on it and we’re waiting for a decision, now no-one knows when that will come – we just don’t know.”
However, Martin added that the “people in the know are telling me they’re hoping it will be July, so I’m going to say July-ish is the probably rough time span”.
But he also advised that until then “nothing else happens”.
Martin went on to explain how the FCA has said that if they are going to be payouts, nobody will need to claim them as they would be issued automatically.
However, he added: “I would still suggest if you want to get ahead of the queue and make sure all the admin is done right and they have all your details and they’re all up-to-date. I would still probably just go and put your claim in now, but only use a free service.
“But you don’t have to, if you just want to wait, if you are eligible you should be paid out – if the Supreme Court rules saying that car finance and the way it was done should be paid out.”
Martin has previously estimated that compensation of around £1,100 could be due on around 40 per cent of all car finance deals made between April 2007 and January 28, 2021.
That means anyone who took out finance with the ‘hidden DCA charge’ to purchase a van, campervan or motorcycle during that period, may be entitled to a refund.
