The Financial Conduct Authority (FCA) is preparing to launch a sweeping consumer compensation programme, aimed at reimbursing motorists who were mis-sold car finance agreements. The initiative is expected to cover millions of contracts arranged between April 2007 and November 2024, with average payments anticipated at around £700 per claimant.
The scheme follows years of scrutiny into how car dealers and lenders structured finance through discretionary commission models. These allowed brokers to raise a customer's interest rate to increase their own commission, a practice the FCA has ruled to be unfair and contrary to consumers' interests. The regulator plans to return overpaid costs to affected borrowers through a formal redress process, set to open in 2025.
