Summary
Millions of drivers might get compensation if they were sold unfair car finance deals. The Financial Conduct Authority (FCA) is looking into finance deals, called discretionary commission arrangements, that charged customers higher interest rates than necessary. A Supreme Court decision might lead to a wider group of people being eligible for compensation by 2026.
Key Facts
- Millions of motorists were possibly sold finance deals with unfair interest rates.
- Discretionary commission arrangements gave dealers extra money based on the interest rate charged.
- The Financial Conduct Authority (FCA) banned these arrangements in 2021.
- The FCA is considering a compensation scheme for those affected before 2021.
- A recent Supreme Court decision could widen who gets compensation.
- Drivers may receive the difference between what they paid and should have paid, plus extra interest.
- Some UK lenders have put aside billions for potential payouts.
- Any compensation system will aim to help consumers without harming the car market.
