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Lloyds Boosts Car Finance Compensation to £1.95 Billion

10/13/2025

Summary

Story summary

Lloyds Banking Group increased its car finance compensation provision by £800 million, to £1.95 billion.
The move follows the Financial Conduct Authority (FCA)'s consultation on a compensation scheme for up to 14.2 million unfair car finance agreements.
Lloyds criticized the FCA's redress methodology as not reflecting losses.
Other lenders, including Close Brothers and BMW, are set to raise provisions.
FCA estimates 44% of motor finance agreements from 2007–2024 may be unfair.

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Story summary

Lloyds Banking Group increased its car finance compensation provision by £800 million, to £1.95 billion.
The move follows the Financial Conduct Authority (FCA)'s consultation on a compensation scheme for up to 14.2 million unfair car finance agreements.
Lloyds criticized the FCA's redress methodology as not reflecting losses.
Other lenders, including Close Brothers and BMW, are set to raise provisions.
FCA estimates 44% of motor finance agreements from 2007–2024 may be unfair.