It comes after companies may have charged customers an extra commission fee without motorists’ prior knowledge. 

Martin urged drivers to send in complaint letters immediately to get things rolling but didn’t put a timescale on when cases would be dealt with.

Alex Neill, co-founder of rights organisation Consumer Voice, said the FCA’s latest announcement suggests finance forms have a “case to answer” which could be good news in the long term. 

Alex explained: “This is a big delay from the regulator and will feel disappointing to everyone waiting for a decision.

“However it certainly suggests there’s a case to answer for car finance firms. So people may be consoled by the fact that although they will have to wait longer, they could be a step closer to ultimately getting compensation.”

Yesterday, the FCA confirmed that the pause would be put into place to look into whether a “consumer redress scheme” could be established. 

The FCA statement read:  “It is too early to say if we will intervene in this way, but based on our work so far, it is more likely than when we started our review. 

“We consider allowing for this possibility preferable to the uncertainty and greater burden for firms created by a shorter pause that may be subsequently extended.

“If we decide not to introduce an alternative way of dealing with complaints, we’ll consult on ending the pause earlier. In this case, firms would start dealing with complaints again in the usual way.”

Specialists feel this wording could be vital with the FCA now seriously considering looking into financial repayments.

Aidan Rushby, founder and CEO of finance firm Carmoola added: “Importantly, the FCA has said it is ‘more likely’ to intervene with a consumer redress scheme than it was when it began its investigation, in what is perhaps the clearest indication yet that car buyers could expect some form of compensation.”