Martin Lewis shares good news for motorists who could be owed £1,400

Martin Lewis has revealed that more drivers may be eligible for compensation of up to £1,400 following a significant update from the Financial Conduct Authority (FCA). According to the Money Saving Expert founder, the FCA has established a "redress scheme" that requires firms to contact and settle with all affected borrowers.

Martin explained that, unlike initially thought, motorists no longer need to submit a formal complaint to car finance firms to receive a payout. This development is expected to "stretch the net" of those eligible for compensation, with some potentially receiving four-figure sums.

Martin shared the update on social media platform X, urging his followers to spread the word. He wrote: "The regulator @TheFCA has just put out a statement saying it will consult on 'an industry-wide redress scheme'. Now, 'consult' is mostly technical. This really means it has made up its mind. I've bashed out at top speed an explanation."

Martin elaborated: "It plans a section 404 redress scheme that will require lenders to proactively contact all borrowers who met the miss-selling criteria and offer them a fixed redress based on FCA rules." As a result, individuals will not need to file complaints, and instead, will receive a payout determined by the FCA based on their specific situation, explained the Express.

Martin noted that this approach is likely to expand the pool of eligible recipients, as well as eliminating the need for claims firms. The FCA's investigation has been focused on determining whether car finance firms improperly sold discretionary commission arrangements to customers without their knowledge.

Martin has clarified that the Financial Conduct Authority (FCA) is currently calculating the compensation amounts for those impacted. He anticipates that some motorists might receive as much as £1,400 after the payout process is completed.

The FCA's recent statement outlines: "Under a redress scheme, firms would be responsible for determining whether customers have lost out due to the firm's failings. If they have, firms would need to offer appropriate compensation. We would set rules firms must follow and put checks in place to make sure they do. A redress scheme would be simpler for consumers than bringing a complaint."

While there's no concrete timeline for the payments yet, money-saving expert Martin Lewis hints that drivers might expect to see payouts by summer.

On X, Martin remarked: "The Supreme Court will hear the case in early April, then likely take a few weeks to decide. The FCA will then aim to sort out what's happening on its redress scheme within six weeks. So we should be hearing towards the beginning of June."

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