Barclays to begin car finance payouts months before outcome of legal challenge
The bank will contact a limited pool of customers and says early offers will count toward its £430 million compensation bill.
- Barclays has become the first bank to offer compensation payouts to customers mis-sold motor finance, bypassing delays in the Financial Conduct Authority's broader redress scheme caused by legal challenges from Volkswagen and Mercedes.
- The Financial Conduct Authority launched its £9 billion redress scheme earlier this year, estimating an average payout of £829, but legal disputes partially suspended the process, leaving lenders reluctant to pay until court proceedings conclude.
- Barclays Partner Finance will contact customers with complaints acknowledged on or before October 1, 2026, with offers calculated using the FCA's methodology. Customers have one month to accept, forfeiting the right to seek additional compensation.
- Stephen Braviner Roman, the FCA's general counsel, said the regulator supports fair early offers if clearly explained. The Financing and Leasing Association cautioned that rushing settlements risks consumers receiving outcomes that may not reflect final legal positions.
- Harry Charalambous of consultancy Broadstone said lenders "could see a number of lenders break cover and begin offering compensation ahead of the wider scheme." Customers declining offers will await the Upper Tribunal hearing conclusion in February.
11 Articles
11 Articles
Barclays begins motor finance payouts as FCA sets ground rules
Barclays will begin offering payouts to motor finance consumers ahead of the forthcoming legal battle after the City watchdog introduced its “minimum expectations” for lenders wishing to settle early. The bank said it would make payments using the Financial Conduct Authority’s (FCA) redress scheme methodology and acceptance would be optional. Once a consumer accepts the [...]
Sky News UK
Barclays to begin car finance payouts months before outcome of legal challenge
Barclays' move will come as the Financial Conduct Authority sets out expectations of lenders making settlement offers outside the scope of its £9bn compensation scheme, Sky News learns.
Majority of consumers want ‘early motor finance’ pay out
The Financial Conduct Authority (FCA) has released research which shows consumers showing many motor finance redress want the money now instead of waiting for the legal challenges to be settled. It said Barclays Partner Finance has confirmed it will make settlement offers to some of its customers owed compensation. It said almost 9 out of ...
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