Martin Lewis has reassured victims of car finance mis-selling that their current contracts will not be jeopardized if they make a claim for compensation.

On his Martin Lewis podcast, he explained: "Absolutely not. That would be a breach of FCA regulations. You are absolutely free to make the claim. The FCA Redress Scheme is out for consultation at the moment.

"It should be launching sometime in early 2026 and as a part of that, you cannot be penalized for complaining about their bad behaviour."

He added: "I've been doing this a long time now. I was known as the 'big gob in chief' of the campaign to reclaim bank charges in about 2005-2006 and at the time, we were starting to see some firms penalizing customers who complained, saying, 'we'll sort your complaint about, but we don't want your custom in future'."

He continued: "One of the things I campaigned under that is to make sure that was banned, and they weren't allowed to do that, and rules have changed for a very long time now you can't be penalized for complaining about their bad behaviour. So don't let it put you off at all."

This follows the Financial Conduct Authority’s (FCA) announcement of a consultation on a potential compensation scheme for the industry. 

The FCA revealed that motorists may benefit from payouts after discovering that numerous motor finance companies failed to adhere to regulations or legal requirements, particularly by not disclosing to customers the commission that lenders paid to car dealers arranging the loans. 

On October 7 the FCA announced a consultation for the biggest redress scheme since PPI, with a predicted £8.2 billion to be paid out.

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Nikhil Rathi, chief executive of the FCA, said: “It is clear that some firms have broken the law and our rules. It’s fair for their customers to be compensated.

“We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal.

“Our aim is a compensation scheme that’s fair and easy to participate in, so there’s no need to use a claims management company or law firm. If you do, it will cost you a significant chunk of any money you get.

“It will take time to establish a scheme but we hope to start getting people any money they are owed next year.”