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FCA Sets Final Plans for UK Car Finance Compensation Scheme
The FCA expects payments averaging £829 for about 12 million UK motor finance deals mis-sold due to undisclosed commissions, with 75% of eligible consumers likely to claim.
- On Monday, the Financial Conduct Authority will publish its final decision detailing the payout programme for 14 million motor finance agreements affected by undisclosed commissions.
- Undisclosed 'discretionary commission arrangements' between lenders and brokers allowed interest rates to be adjusted without customer negotiation; an estimated 40% of car finance deals made between April 6, 2007, and November 1, 2024, were affected.
- Payouts are expected to average about £700 per agreement, with the industry facing a total cost of £11 billion; major lenders including Barclays, Lloyds, and Close Brothers have already set aside significant funds.
- If approved, lenders have three to five months to contact customers; the FCA advises consumers to complain directly to their provider, warning that using a claims management company could result in losing over 30% of compensation.
- Legal challenges from lenders or CMC firms could still delay the process, as parties have 28 days to present a legal challenge to a tribunal before any payouts are made.
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Leaning Left6Leaning Right4Center39Last UpdatedBias Distribution80% Center
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C 80%
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