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Martin Lewis predicts drivers could receive £15bn in compensation from car finance scandal despite Supreme Court verdict

Consumer champion Martin Lewis has reacted to the Supreme Court’s verdict in the car finance mis-selling scandal and predicted what the next steps could be.

On Friday, August 1, the Supreme Court sided with lenders, saying that they were not liable for hidden commission payments in car finance agreements.


As a result, lenders and dealers may have escaped having to pay compensation to millions of impacted drivers.

The Supreme Court ruled that just one of the three cases heard would proceed after the court of Appeal “made a number of mistakes”.

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Martin Lewis

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Financial expert Martin Lewis suggested that between £5billion and £15billion in compensation could be handed out

The Financial Conduct Authority (FCA) said it would take time to digest the findings of the Supreme Court’s decision.

A spokesperson for the regulator confirmed that it would confirm whether a consultation on a redress scheme would take place before the markets open on Monday, August 4.

Under original plans, the FCA said it would set out its future measures within six weeks, but wanted to provide clarity as quickly as possible.

The spokesperson added: “Our aims remain to ensure that consumers are fairly compensated and that the motor finance market works well, given around two million people rely on it every year to buy a car.

Lord Reed delivered the Supreme Court's car finance verdict yesterdaySUPREME COURT |

Lord Reed delivered the Supreme Court’s car finance verdict yesterday

“If we do decide to propose a redress scheme, we’ll consult widely. In designing a redress scheme, as we have previously said, we will balance principles including fairness, timeliness, and certainty.”

Reacting to the Supreme Court’s decision, money saving expert Martin Lewis took to social media to share his thoughts on the Supreme Court verdict and what it could mean for drivers.

He clarified that this was just one part of the car finance scandal, and that drivers would still be able to receive compensation if they were impacted by discretionary commission arrangements (DCAs).

This involved lenders introducing higher interest rates for consumers to raise their commission, although the vast majority of people did not know this was taking place.

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Lewis said he would be pushing the FCA to announce the redress scheme consultation for discretionary commission arrangements, which he noted that there was a “90 per cent likelihood” of this happening.

The money saving expert added: “Now my guesswork, because we don’t have the data, we don’t have the detail.

“But my guesswork, is you’re talking somewhere between £5billion and £15billion of payouts, because it’ll primarily just be discretionary commission arrangements.

“The excessive commission is always going to be on a case-by-case basis. So it’ll be interesting to see how the regulator deals with that.”

Supreme Court car finance decisionPA |

The Supreme Court sided with lenders in a highly anticipated verdict on August 1

Despite this, he exercised caution, noting that drivers and the industry should wait over the weekend for the FCA’s decision on Monday.

The TV presenter also noted that although Government intervention was hinted at prior to the Supreme Court update, this was unlikely to happen following the decision.

Lewis concluded, saying: “My biggest message to you while we wait exactly what’s happening; don’t do anything.

“Don’t sign up to a claims firm. You don’t need to do anything right now. Take your hands. Sit on them. Bye.”

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