Watchdog clears early car finance payouts as Barclays moves first
The Financial Conduct Authority will allow lenders to make early compensation offers to drivers mis-sold car finance, provided they are no worse than its proposed redress scheme, which faces a legal challenge in February. Barclays will begin making offers now. “Fair settlement offers could result in some people getting money sooner,” said the regulator’s Stephen Braviner Roman.
The FCA expects only a minority of claimants to receive early offers; most must wait for next year’s court case, with scheme payouts unlikely before late 2027. Customers who accept give up any further claim, and there is no obligation to agree. The scheme covers loans taken out between April 2007 and November 2024, mostly where dealers earned commission linked to the interest rate charged. Average payouts of about £829 are expected on some 12 million agreements, costing the industry up to £9.1bn.