Over 23 million drivers in the UK could be owed money. It comes after car dealers overcharged customers for motor finance deals taken out between 2007 and 2021.
A new poll from Slater and Gordon shows that 45% of UK adults believe they are eligible for the compensation. Millions of car loans sold during the 14-year period saw motorists overcharged in return for bigger commission payouts. The Financial Conduct Authority (FCA) is investigating the unfair commissions and a major Supreme Court ruling is expected this month.
The FCA estimates that discretionary commission arrangements (DCAs) costed drivers around £300 million every year. The practice is now banned and the regulator is working to compensate motorists affected.
Alex Neill, co-founder of Consumer Voice, said: "People are rightly concerned about the use of secret commissions in car finance. Millions of drivers feel misled and have suffered financial harm – so it’s no surprise that public expectations for compensation are high."
He added: "Our own research shows that two-thirds of consumers would have acted differently if they had known about dealer commissions, and many remain concerned about how those commissions impact what they pay."
The Consumer Voice found that over half of people who took out car finance loans before 2021 still don't know whether their dealer received commission from their lender.
Elizabeth Comley, chief operating officer at Slater and Gordon, said: "The public rightly expects to be compensated for losses. While the FCA is trying to put things right, there’s a risk that a redress scheme leaves many people disappointed and keen to challenge the process.
"That sort of backlash would be bad for everyone – the scandal would drag on for years, the courts would be inundated with challenges and the public would be denied the clear resolution they want."
An MP campaigning on behalf of the victims said that drivers should have been protected. Meanwhile, Martin Lewis said billions of pounds of overcharged interest could be paid back to millions of people.
Speaking to GB News, Bobby Dean MP, said: "When you get finance, you require impartial advice to get the finance element. When the dealer is presenting to be the honest broker and they're not, when they've already stitched up the deal behind closed doors, that is the problem.
"There are too many people who think 'that's all part of buying a car, if you got ripped off, you got ripped off, that's on you'. But it's the finance element that distinct because it's complicated and because you need advice, and that needs to be impartial, that's the bit that's gone wrong here."
Consumer Voice urged drivers to do the following: "Don’t be left in the dark if you suspect you were not informed about the commission fee – and, as a result, may have not got the best deal possible on your car finance.
Contact your dealer or lender to check if your deal involves a commission arrangement. Acting now could help you understand more about what you could be owed when the regulator makes a decision about compensation.
