Car finance: Barclays becomes first big lender to offer payouts for mis-selling of loans
Summary
Barclays Partner Finance will contact tens of thousands of customers who have complained about mis-sold car loans and offer them early compensation settlements. Customers who accept will receive payment from Barclays but cannot later seek more compensation for the same loan; those who wait could receive more, less or no compensation, depending on the outcome of legal challenges to the UK scheme.Key Facts
- The UK Financial Conduct Authority announced a £9.1bn compensation scheme in March for people overcharged on motor finance.
- The alleged overcharging involved commission payments between lenders and car dealers on loans made from 2007 to 2024.
- Legal challenges have partly suspended the scheme, and a court hearing is due in February 2027.
- Barclays Partner Finance plans to contact tens of thousands of customers who have already complained over the next few weeks.
- Barclays says it will calculate offers using the FCA model, and customers will have one month to accept or reject them.
- Customers who accept an offer give up the right to pursue further complaints or legal claims over commission on that loan.
- The FCA says scheme payments could start in 2027 if the legal challenge fails, but could be delayed until 2028 or later if the case is appealed or the scheme is changed.
- Barclays says it will not ask customers to repay compensation if the final scheme outcome means they would have been entitled to less.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.
