Drivers may get compensation offers before car finance saga ends
Summary
The UK Financial Conduct Authority says lenders may offer compensation early to drivers affected by mis-sold car finance, provided the offers are no worse than payments under its proposed scheme. Most drivers are expected to wait for a legal challenge in February, and compensation under the scheme may not arrive until late next year.Key Facts
- Barclays said it will begin making early compensation offers, and other lenders may follow.
- Customers do not have to accept an early offer and can wait for the court case and proposed scheme.
- The FCA expects only a minority of claimants to receive early offers.
- The legal challenge to the FCA’s compensation scheme is due to be heard in February.
- The FCA estimates that about 12 million car loans taken out between April 2007 and November 2024 are eligible for compensation.
- The loans mainly involved dealer commissions linked to customer interest rates that were often not disclosed.
- Average compensation is expected to be about £829 per loan.
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