Martin 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.
“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.
“Therefore, people won’t need to complain. They will be paid out an amount dictated by the FCA to firms based on their situation. This likely stretches the net of who’ll be paid far wider (and means there’s no need to use claims firms).”
The FCA’s probe has been looking into whether car finance firms wrongly sold customers discretionary commission arrangements without motorists knowledge.
Martin explained that the FCA was currently working out exactly how much that any affected individuals will receive.
However, he has predicted that some road users could be awarded up to £1,400 once payouts have been finalised.
The latest FCA statement reads: “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.”
Although a firm timeline for payments has yet to be received, finance guru Martin Lewis has suggested road users may only have to wait until the summer.
Martin added on X: “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.”