Story perspectives

FCA Unveils £7.5 Billion Compensation for Mis-sold Car Finance

4/2/2026

Summary

Story summary

The Financial Conduct Authority (FCA) announced a £7.5 billion compensation scheme for over 12 million drivers mis-sold car finance deals due to hidden commissions.
Each affected driver is expected to receive an average payout of £830.
The scheme covers agreements made from April 6, 2007, to November 1, 2024, divided into two parts.
Lenders must contact eligible customers by the end of 2026, while those who have already complained may receive compensation sooner.
Customers have until August 31, 2027, to file complaints.

History

Historical Context

Established in 2001, the Financial Services Compensation Scheme (FSCS) was crucial in protecting consumers during the 2008 financial crisis, which saw over £26 billion in payouts. Following significant reforms, the Financial Conduct Authority (FCA) now oversees compensation, addressing issues like mis-sold car finance deals. This initiative aims to restore consumer trust and ensure accountability in the financial sector, with average payouts reaching £830 for affected drivers.

1 of 2

Story summary

The Financial Conduct Authority (FCA) announced a £7.5 billion compensation scheme for over 12 million drivers mis-sold car finance deals due to hidden commissions.
Each affected driver is expected to receive an average payout of £830.
The scheme covers agreements made from April 6, 2007, to November 1, 2024, divided into two parts.
Lenders must contact eligible customers by the end of 2026, while those who have already complained may receive compensation sooner.
Customers have until August 31, 2027, to file complaints.

1 / 2