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Car loan scandal victims may get average £700 payout from 14m loans, FCA says

ended 08. October 2025

The Financial Conduct Authority (FCA) has announced plans for a £1.4 billion compensation scheme for drivers who were charged higher interest rates on car finance because of unfair commission models between 2007 and 2021.

The scheme would see affected customers automatically compensated where lenders allowed car dealers to adjust interest rates to increase their own commission — a practice the FCA banned in 2021.

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3 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Considering the outcome for consumers has been pushed from pillar to post by the various courts of the land, this is some good news although shoudl be taken with a pinch of salt. No doubt there will be further legal challenges to this proposal, and the collective dragging of heals continues.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
Shockingly, for 14 years, car dealers have treated interest rates like volume controls, cranking them higher to boost their own commission while we remained blissfully unaware that we were funding dealer bonuses through inflated borrowing costs.

Regulators apparently believed that market forces would somehow police themselves without meaningful oversight or transparency requirements.

This compensation bonanza will doubtless encourage other consumer sectors to examine their own creative interpretation of consumer duty obligations. The credit card and personal loan industry for once does need a similar crack down with it's own skeletons in the closet.
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Colette Mason
AI Ethics Consultant at Clever Clogs AI
A clear case of widespread grifting which made screwing customers over more profitable than serving them correctly. Years of hidden structural betrayal dressed up as 'business as usual'.