The UK’s financial regulator has banned adverts relating to the car finance redress scheme over concerns that they misled drivers about compensation.
The Financial Conduct Authority confirmed that it had banned advertisements from a company that used edited and unauthorised clips of money saving expert Martin Lewis.
Banned adverts included edited footage of the expert and misleading claims about the average motor finance compensation payments.
Some commercials also used the FCA logo without permission, prompting the regulator to take action.
The claims management company (CMC) has been required to remove advertising and update or take down its website until it complies with FCA rules. The adverts have since been removed.
Adverts claimed that consumers would receive £1,846 on average for compensation relating to the car finance scandal.
The CMC provided no explanation of how the figure was reached, with the FCA’s actual compensation scheme estimating that the average agreement will receive £829.
It also promoted a “no win, no fee” service on its websites, without explaining how the scheme works.
Some of the banned adverts included unauthorised footage of Martin Lewis
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GETTY/PA
The adverts also failed to tell drivers that they could claim for free by applying to their lender if they think they were impacted.
Motorists can also use the Financial Ombudsman Service to make claims, without needing to use a law firm or claims management company.
Alison Walters, director of consumer finance at the FCA, reiterated that the regulator would take “swift action” in cases where rules may be being broken.
She added: “Consumers should be wary of adverts that overpromise or give the impression they are endorsed by the FCA or well-known individuals.
It is estimated that 12.1 million agreements were impacted by the car finance scandal
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GETTY“Our scheme is free and people don’t have to use a CMC or law firm. If they do, it’s important that they can trust them.”
Posting on social media site X, formerly known as Twitter, financial expert Martin Lewis said he was “delighted” that the FCA had taken action against the rogue adverts.
The FCA has consistently urged motorists to avoid using a law firm or CMC when submitting claims relating to car finance compensation.
Prior to the launch of the redress scheme, it warned that drivers could risk losing up to 35 per cent of their car finance compensation when using a law firm or CMC.
The FCA said the average agreement would receive £829 in compensation in the aftermath of the car finance scandal | PA
Since January 2024, the FCA has taken action against 899 misleading adverts, requiring CMCs to remove or amend the commercials.
Drivers are encouraged to complain directly to Conclusive Financial Ltd (Conclusive), which also trades as PCP Refunds, if they believe they have been misled.
If they do not reach a satisfactory conclusion with the company, they can refer their complaint to the Financial Ombudsman Service.