More than a quarter of a million complaint emails have been sent after just one day of a free motor finance reclaim tool going live, consumer champion Martin Lewis has said.

Writing on X, formerly Twitter, Mr Lewis said: “Car finance reclaiming update. Staggeringly after just 1 full day of our free complaint tool being live… 262,500 complaint emails have been sent.”

Mr Lewis added in a further post: “These numbers are off the charts – far bigger even than the closing days of the PPI (payment protection insurance) deadline.”

The free tool and guide are on the MoneySavingExpert.com website, which was founded by Mr Lewis.

The Financial Conduct Authority (FCA) has launched a major investigation into whether people could be owed compensation for being charged too much for car loans, following a high number of complaints.

In January, it said it would look at historical discretionary commission arrangements in the motor finance market. If it finds widespread misconduct, the regulator has said it will make sure those affected receive settlements in an orderly, consistent and efficient way.

Before January 2021, some lenders allowed brokers (the person arranging the loan, for example, a car dealer) to adjust the interest rates they offered customers for car finance.

Typically, the higher the interest rate, the more commission the broker received. This was known as a discretionary commission arrangement.

Discretionary commission arrangements created an incentive for brokers to increase how much people were charged for their car loan – and the FCA banned this practice in 2021.

But the regulator has said there has since been a high number of complaints from customers about how much they were charged before the ban.

Providers (lenders and brokers) are rejecting most of these complaints, because they believe they have not acted unfairly and have not caused customers to lose out, the regulator has said.

Speaking on ITV’s Good Morning Britain on Thursday, Mr Lewis said he had been working on his guide since the FCA launched its investigation last month.

He told the programme: “We launched the guide and a free tool that does the template and sends the whole complaint, does it all for you at no cost, on Tuesday night at 7.30, so we have had one full day of it.

“I’ve never seen anything like it, even the final days of PPI weren’t like this.”

Addressing viewers, Mr Lewis said: “If you had a car, a van, a motorbike, a campervan on finance, before January 28 2021, you may have been mis-sold and you will not know now.

“Even when I’ve told you if you are in that category, all that tells you is could you have been mis-sold? So part of the complaint process and what the template letter does is, the first one is to say: ‘Tell me. Did you have a discretionary commission arrangement in place on my finance’?”

The Financial Ombudsman Service (FOS) previously said it has heard from more than 10,000 people who fear they were charged too much for their finance and “many more are waiting in the wings”.

The FOS has resolved complaints where it found the way the commission arrangement between the lender and the car dealer worked was unfair on the consumer – and it is thought this could trigger more complaints.

The FCA is using powers under the Financial Services and Markets Act 2000 to review historical motor finance commission arrangements and sales.

The regulator plans to set out next steps in the third quarter of 2024.

Sheldon Mills, executive director of consumers and competition at the FCA, said last month: “We are taking a closer look at historical discretionary commission arrangements in the motor finance market following a high number of complaints from customers, which are being rejected by firms.

“If we find widespread misconduct, we will act to make sure people are compensated in an orderly, consistent and efficient way.”

The FCA has put a pause on a deadline for motor finance firms to provide a final response to relevant customer complaints.

People can still complain to their provider, but they will not have to respond until after September 25, at the earliest.

The FCA has further information about the issue for consumers on its website at fca.org.uk/consumers/car-finance-complaints.