Millions of drivers to get £700 compensation from car mis-selling scandal
About 14 million people set to get payouts over car finance scandal
- The Financial Conduct Authority (FCA) has indicated that compensation payouts for approximately 14 million unfair motor finance deals could commence next year.
- Customers could receive an average of about £700 per deal, though this is less than previous estimates from the regulator.
- Motor finance firms failed to properly inform customers about commission paid by lenders to car dealers, leading to potential overcharging.
- This issue stemmed from 'discretionary commission arrangements' where brokers could adjust interest rates, incentivising higher rates for increased commission.
- The FCA outlawed this practice from January 2021, and its chief executive, Nikhil Rathi, is aiming for a simple and fair compensation scheme for those affected.