United Kingdom's Financial Conduct Authority rules that around 12 million people are entitled to financial compensation

The Financial Conduct Authority has determined that approximately 12 million people are entitled to financial compensation for mis-sold motor finance agreements between 2014 and 2024, with an average payout of £829 per individual.

By Claire Donnelly1 min read

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The FCA has mandated that car finance lenders pay £7.5bn to consumers who took out eligible motor finance deals between 1 April 2014 and 1 November 2024. The administrative cost of the compensation scheme is forecast to reach £1.6bn, bringing the total financial impact to £9.1bn.

The FCA identified that certain motor finance arrangements were not disclosed to buyers, creating incentives for lenders to charge higher interest rates. These practices resulted in consumers paying more than necessary on their car finance agreements.

The compensation scheme is divided into two periods: one covering agreements from 6 April 2007 to 31 March 2014, and another from 1 April 2014 to 1 November 2024. The FCA stated that legal challenges to the earlier period should not delay redress for those affected from 2014 onwards.