The regulatory body overseeing financial matters has provided an update for numerous drivers anticipating more information about a significant car finance compensation program. The Financial Conduct Authority (FCA) is presently seeking input on the specifics of a compensation initiative for individuals who were unjustly sold a car finance agreement between 2007 and 2024 due to insufficient disclosure of broker commissions.
Drivers may be entitled to compensation if their car finance agreement included a discretionary commission arrangement (DCAs), allowing brokers and car dealers to raise interest rates on loans to earn additional commissions. Other eligible car finance agreements may involve high commission arrangements or situations where a broker failed to disclose exclusivity with a single lender.
In a recent announcement, the FCA has directed motor finance firms to expedite the handling of complaints two months earlier than initially scheduled. The original deadline of July 31, 2026, has been advanced to May 31, 2026.
The processing of these complaints has been on hold since January 2024, but firms are expected to continue investigations even though formal responses have not been required yet. Firms must begin sending final responses to any motor leasing complaints from December 5, 2025, in adherence to standard complaint resolution protocols.
Over 14 million car finance agreements could be encompassed in the forthcoming compensation scheme, anticipated to launch in the early part of next year. The FCA previously estimated that most drivers might receive about £700 in compensation. The FCA emphasized the importance of prompt complaint resolution, noting that some consumers have been awaiting responses for nearly two years and that complaints cannot be delayed indefinitely.
Drivers have been advised by the FCA not to engage lawyers or claims management companies for complaints. Individuals can file complaints directly with the lender who provided the car finance at no cost. The FCA mentioned that those who have already lodged complaints before the scheme’s implementation are likely to receive compensation more quickly, with lenders potentially disbursing £8.2 billion in compensation.
Renowned financial expert Martin Lewis has encouraged individuals to submit their complaints promptly if they believe they may be eligible for compensation. Lewis highlighted the benefits of initiating a complaint to ensure thorough review, especially in cases where detailed car finance information may have been lost by the finance company.
By continuing to use our website and services, you consent to the use of cookies and agree to the terms outlined in our Privacy Notice and Terms and Conditions.