Millions of car finance drivers could STILL receive compensation – check if you're eligible
Click to share on X/Twitter (Opens in new window)
Click to share on Facebook (Opens in new window)
MILLIONS of car finance drivers could still receive compensation after a major update by the regulator.
The Financial Conduct Authority (FCA) has confirmed it will consult on a redress scheme for motorists stung by extra charges and interest.
Sign up for Scottish Sun
newsletter
Sign up
1
Drivers could still get compensation for mis-sold car finance
Credit: Alamy
Drivers who took out PCP and hire purchase agreements could be in line for money.
The FCA estimates most drivers will most likely receive no more than £950 compensation each.
Nikhil Rathi, chief executive of the FCA, said: "It is clear that some firms have broken the law and our rules.
"It's fair for their customers to be compensated.
"We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal."
The FCA will launch a consultation by early October, and if a redress scheme goes ahead, payment will start being issued in 2026.
The regulator said the total cost of any compensation scheme will depend on the outcome of the consultation.
However, it estimates the cost will be lower than £9billion and up to a maximum of £18billion.
Mr Rathi added: "Our aim is a compensation scheme that's fair and easy to participate in, so there's no need to use a claims management company or law firm. If you do, it will cost you a significant chunk of any money you get.
"It will take time to establish a scheme but we hope to start getting people any money they are owed next year."
In June, the FCA set out the principles that will guide any redress scheme. These are:
comprehensiveness
fairness
certainty
simplicity and cost effectiveness
timeliness
transparency
market integrity
Who is affected?
Drivers who took out PCP and hire purchase agreements before January 28, 2021, could be in line for compensation.
Motorists who took out these types of deals could be affected by so-so-called discretionary commission arrangements (DCAs), which applied to 40% of car finance deals.
This was where brokers and dealers could increase the amount of interest they charged without telling drivers.
By doing so, they earned higher commission.
But the FCA banned DCAs in January, 2021, and anyone who was affected by one prior to this could be in line for compensation.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
13 minutes ago
- The Independent
Cashback concerns raised when people are considering transferring their pension
Concerns that some consumers may be deciding to transfer their pension based only on the prospect of rewards such as cashback have been raised by the City regulator. The Financial Conduct Authority (FCA) said some people may be focusing on an immediate or near-term reward, such as cashback on signing up to a consolidation service. This means they may not be considering the full financial implications of their decision, the regulator said. It added that it recognises the efforts firms already make to flag up to customers the often valuable benefits of their existing scheme. The regulator said that pensions dashboards, which will eventually allow people to see all their pension pots in one place, will make it easier for consumers to track their pensions. This may also drive higher demand to consolidate pension pots, the regulator said. The research was published as part of the regulator's findings from its multi-firm review of life insurers' pension transfer processes. The FCA said on its website: 'We expect firms to be resourced with sufficient, well-trained staff to service the products they have sold or acquired and be able to respond to foreseeable spikes in demand.' Under the Consumer Duty, which requires firms to put customers at the heart of what they do, the FCA said it expects firms to support consumers in making informed decisions. This means they should ensure their communications meet their customers' information needs, it said. The FCA's website said: 'Our findings suggest that firms are well-intentioned and seek to ensure consumers receive good outcomes when transferring their pensions.' Jon Greer, head of retirement policy at wealth manager Quilter, said: 'The FCA has said it is concerned that consumers are transferring their pension provider simply to take advantage of an immediate or near-term reward or incentive.' He said cashback for pension transfers 'could be a very tempting offer' for many people. He continued: 'However, many consumers will be unaware of the benefits their existing pension arrangements may have, and that by transferring you automatically give these up. This can include a higher tax-free lump sums or the earliest age you can access benefits – it all depends on the terms of the scheme. 'The FCA suggests that firms are rightly doing what they can to provide that information to a customer looking to transfer, but given where pension engagement is in this country, it is an uphill battle. 'The upcoming pensions dashboard is going to provide a lot more visibility to people of their various pensions, and thus there could be increased demand for consolidation services.'
Finextra
3 hours ago
- Finextra
Klarna reports Q2 losses amid US expansion plans
Swedish buy now pay later (BNPL) platform Klarna prepares for its New York listing, despite reporting a net loss in Q2. 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. The plan to go public was delayed while trade tariffs were stirring up the market, but Klarna is back on track to be listed in the fall. According to the Financial Times, Klarna reported a $53 million loss for the three months to June, up from $18 million for the same time last year, and a Q2 loss of $24 million. The Swedish fintech is expanding its offering, having gained an Electronic Money Institution licence from the UK's FCA in June, gearing up to dominate the retail banking sector. The BNPL giant has been awaiting its expansion into the US, with revenues increasing to $823 million this year, rising 21%. Klarna CEO Sebastian Siemiatkowski revealed in May that the company was going to scale back their AI strategy and focus on human support in customer service. Klarna reported that credit losses declined from last year, reporting 0.45% of volume this year, compared to 0.48% in 2024. Earlier this month, Klarna's delinquency rate on BNPL loans fell, which was an improvement on last year's reports.
Finextra
a day ago
- Finextra
Bitpanda launches largest crypto offering in UK
European digital currency platform Bitpanda is now available in the UK, making over 600 cryptoassets available to investors. 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. After gaining approval by the UK Financial Conduct Authority (FCA) in February 2025, the Bitpanda app has officially launched in the UK, making its full suite of offerings available to new users. The platform boasts all forms of cryptocurrency, including emerging coins, tokens, indices, Bitcoin, Ethereum, and stablecoin. With over 7 million users across Europe, Bitpanda aims to make cryptocurrency more curated, accessible, and secure for UK users. Eric Demuth, co-founder and CEO of Bitpanda, commented: "The UK is a global financial hub, and home to investors who are financially literate and tech savvy. Demand for cryptoassets is rising rapidly, and we're here to meet it. We believe the UK will grow to be one of our largest markets for us in the next two years and our goal is simple: to be the best, most secure, and most complete way to invest in cryptoassets in the UK. Today's launch is just the beginning." The platform is also launching Bitpanda Technology Solutions in the UK, it's B2B infrastructure arm, that develops cryptoasset products with major partners such as Deutsche Bank, Societe Generale, Raiffeisen, and LBBW. Bitpanda has also signed a global partnership with Arsenal FC, becoming the team's official crypto trading partner. Pantelis Kotopoulos, UK country director of Bitpanda, stated: "UK investors deserve a platform that matches their ambition and at Bitpanda we've built a platform that does exactly that. We're here to offer a real alternative - with more assets, a better and more intuitive user experience, and zero tolerance for shortcuts."
