The Financial Conduct Authority (FCA) has revealed plans for what could become Britain's largest ever consumer compensation scheme, with up to £18bn set aside for victims of unfair car loan practices.
Who qualifies for compensation?
Millions of UK consumers who purchased vehicles using finance agreements between 2007 and 2021 may be eligible for payouts. The scheme specifically targets cases where lenders failed to properly disclose commission arrangements between dealers and finance companies.
How much could you receive?
While individual payments will vary, the FCA estimates:
- Average payout of £1,000-£1,500 per claim
- Some cases could receive over £10,000
- Total scheme value between £16bn-£18bn
What happens next?
The regulator has outlined a three-stage process:
- Registration: Affected consumers will be contacted automatically if their details are held by lenders
- Assessment: Cases will be reviewed against the new compensation criteria
- Payment: Successful claims will receive direct payments or loan balance reductions
The FCA warns consumers to beware of claims management companies charging upfront fees, as the process will be handled directly through approved lenders.
