- The Financial Conduct Authority (FCA) has launched a compensation scheme for approximately 14 million drivers mis-sold car finance deals due to hidden commission arrangements.
- Affected individuals are expected to receive an average payout of £830, with the total redress bill for firms estimated at £7.5 billion.
- The scheme covers car finance agreements made between 6 April 2007 and 1 November 2024, with firms required to identify and contact mis-sold customers by December 2026.
- The mis-selling occurred because some companies used 'discretionary commission arrangements' allowing brokers to adjust interest rates, leading to higher costs for motorists.
- The FCA has also established a taskforce to address 'poor practice' by claims management companies and law firms, advising that the scheme is free and does not require third-party involvement.
IN FULL
Car finance scandal compensation scheme revealed for millions of UK motorists
