GAP Insurance Claims Are Gathering Pace and the Regulators Can No Longer Say They Were Not Warned

The Warning Is Now Being Heard

Since 2024 I have been warning that GAP insurance has all the hallmarks of the next major mis-selling scandal. Not because of one bad sale, one careless dealership, or one isolated complaint, but because the evidence received points to a market-wide problem that has been allowed to sit in plain sight for years.

That message is now starting to reach the places it needs to reach.

Parliament Is Now Taking Interest

I have now been contacted by a serving Member of Parliament who is interested in discussing my findings and reviewing the mounting evidence of widespread and systemic GAP insurance mis-selling. That is a significant development, because this issue can no longer be brushed aside as a niche complaint point or a bit of noise from professional representatives.

The files are there. The figures are there. The patterns are there. The only question now is whether those with the power to act are prepared to do so before this becomes yet another scandal they claim, years later, to have taken seriously all along.

Formal Notice Has Been Served

Formal notice has already been served on the Financial Ombudsman Service, and evidence has also been provided to the Financial Conduct Authority. That evidence includes grotesque levels of commission, inadequate and/or missing suitability checks, serious fair value concerns and discretionary commission arrangements sitting within the product.

This overwhelming evidence goes to the heart of whether consumers were treated fairly, whether the product was properly assessed as suitable, and whether customers were being sold protection or simply being used as a revenue stream.

The FCA and FOS Are at a Crossroads

The FCA and FOS have therefore been placed at a crossroads. They can either deal with this properly, early, and head on, or they can sit back and allow history to repeat itself.

We have seen this before with PPI, with motor finance commission, and with other scandals where the warning signs were ignored until the evidence became impossible to deny. The regulators do not get to say, at some future point, that nobody raised the alarm. The alarm has been raised. The evidence has been provided. The pattern has been explained.

The Same Old Ingredients

The uncomfortable truth for the industry is that GAP insurance has many of the same features we have seen in previous scandals. It was commonly sold as an add-on product at the point of vehicle purchase or finance, in the same environment where systemic mis-selling has already been proven.

The commission levels have reached extraordinary levels. The suitability checks, where they exist at all, are usually inadequate. Customers were rarely in a position to understand how the product was structured, how much of what they paid was being swallowed up before it ever reached the actual insurance element, or whether the product was genuinely suitable for their circumstances.

The Market Is Already Moving

And now, as these claims begin to gather momentum, the market itself appears to be telling its own story.

We are seeing lenders pulling out of financing the product. We are seeing insurance providers removing GAP from their offerings. We are seeing firms suddenly distancing themselves from something they were keen to sell for years.

That does not usually happen when everything is fine. Businesses do not walk away from profitable products for no reason. They do not suddenly reassess their position because a few people have asked awkward questions. They do it because they can see the direction of travel.

Representatives Are Waking Up

More and more representatives are now using my consultancy services to monetise their existing motor commission books by identifying and pursuing GAP insurance claims. That, in itself, is going to accelerate the issue.

The evidence is no longer sitting in isolated files. It is being reviewed, organised, challenged, and escalated. Once representatives begin properly interrogating historic GAP sales in the same way motor finance commission arrangements have been interrogated, the scale of the problem is likely to become impossible for lenders, dealerships, insurers, FOS, and the FCA to ignore.

The Excuses Are Already Predictable

The industry has, of course, attempted to reach for the usual excuses. It will say the customer signed the paperwork. It will say the customer received the benefit of the cover. It will say the product may have been useful in a hypothetical scenario. It will say the sale was historic, the complaint is opportunistic, and the paperwork should be taken at face value.

We have heard it all before, and none of it answers the real questions and none stand up to scrutiny.

The Questions That Matter

Was the product suitable?

Was the customer properly assessed?

Was the customer given enough information to make an informed decision?

Was the commission disclosed?

Was the value for money remotely defensible?

Was the sales process designed around the needs of the customer, or around the income generated for the firms involved?

Those are the questions that matter. Those are the questions the FCA and FOS must now face. Not in three years’ time, not after the press catches up, not after thousands of complaints are already stacked up, but now.

No One Can Claim Ignorance Later

This is where accountability begins. The FCA has been told. The FOS has been told. Evidence has been provided. Concerns have been explained. A serving Member of Parliament has now shown interest in reviewing the findings.

The issue is no longer hidden, and those who have been placed on notice cannot later pretend they did not know.

A Chance to Act Properly

If the FCA and FOS choose to take this seriously, they have an opportunity to show that lessons have finally been learned from previous scandals. They can force transparency, require proper disclosure, interrogate commission structures, and ensure complaints are assessed on the real evidence rather than on industry-friendly assumptions.

They can act early and demonstrate that consumer protection means something more than arriving late with a watered-down response once the damage is already done.

If They Sit Back, They Should Expect Scrutiny

But if they choose the other path, if they sit back, delay, minimise, or allow the industry to mark its own homework yet again, then the people and organisations notified will be named publicly.

Consumers deserve to know who was warned, when they were warned, what evidence they were given, and what they chose to do with it.

PPI Mark Two

GAP insurance is not some minor side issue. It is becoming PPI Mark Two.

Different product, same familiar smell: add-on insurance, excessive commissions, poor sales processes, weak oversight, customers left in the dark, and firms pretending there is nothing to see until the numbers become too big to hide.

The Momentum Is Building

The momentum is rapidly building. The representatives are taking an interest. The files are being reviewed. The complaints are being submitted. The evidence is moving before the regulator and Parliament.

The door has been knocked.

FCA, FOS, lenders, dealerships, and insurers should all understand what comes next.

This is the next scandal.

This is GAP insurance.

This is PPI Mark Two.

Let’s go.