Car finance mis-selling payout scheme could cost billions, says FCA
Car finance scandal victims to get less than £950 each in compensation
- The financial regulator estimates the compensation scheme for those impacted by the car finance scandal could cost between £9 billion and £18 billion, a significant reduction from the £45 billion initially projected.
- Individuals eligible for compensation are forecasted to receive less than £950 each.
- The statement from the FCA comes after the Supreme Court ruled that hidden commissions from lenders to car dealers on car loans were not unlawful, impacting millions of potential compensation claims.
- The decision means the majority of claims for mis-sold car loans will not proceed, with only the most serious cases eligible for compensation.
- The FCA plans to launch a consultation for payouts by early October, with the first payments expected in 2026, advising consumers against using claims management companies.