Summary
A scheme has been set up for drivers in the UK to receive compensation if they were mis-sold car finance. The Financial Conduct Authority (FCA) says that about 40% of loans given between 2007 and 2024 may qualify. Drivers must file claims to potentially get money back if they were not informed about certain commission arrangements between dealers and lenders.
Key Facts
- The FCA has identified that around 40% of car loans from April 2007 to November 2024 could be eligible for compensation.
- This compensation is due to people not being informed about discretionary commission arrangements on their car loans.
- Millions of people are expected to receive payouts this year, with an average amount of £829.
- The FCA banned discretionary commission arrangements in 2021 due to concerns about inflated interest rates.
- It is estimated that 12 million people might be entitled to compensation, which is fewer than a previous estimate of 14 million.
- The redress scheme allows claims to be filed directly with lenders without needing to go to court, although some are using claims firms or lawyers.
- Borrowers are warned to be cautious of scammers pretending to be part of this compensation process.
