FCA to Provide Compensation Update to Drivers
FCA confirms car finance compensation update for mis-sold deals to be released today. Learn how the ruling, refunds, and claims process could affect millions of UK drivers.
www.reclaim247.co.ukHere’s the latest on FCA car finance compensation as of May 2026.
Direct answer
- The FCA has moved forward with an industry-wide compensation scheme for motor finance mis-selling, with payouts expected to total about £7.5 billion and an average payout around £830 per eligible agreement. Payments are anticipated to begin later in 2026 and most claims to be settled by end-2027.[3][9]
Key details you might be affected by
- Eligibility: About 12.1 million finance agreements from 2007–2024 are eligible under the scheme, with some tightening of criteria and a cap in around a third of cases to avoid overcompensation.[3]
- What counts: Mis-selling issues include failures to disclose key information at the point of sale; the scheme aims to address those mis-selling cases even if you’ve already complained or are planning to complain.[5][3]
- Process: Lenders have a defined window to inform and payout; the FCA has established oversight and coordination with the Financial Ombudsman, SRA, ICO, and ASA to monitor and resolve disputes efficiently.[3]
What to do now
- Check whether you had a motor finance agreement between 2007–2024 and whether you were subject to insufficient disclosure or mis selling. If so, you may be eligible for compensation even if you have already complained.[3]
- If you haven’t claimed yet, stay alert for communications from your lender once the scheme opens for submissions; they will verify eligibility and calculate payouts, with estimates suggesting most individual payments will be modest but collectively substantial.[3]
Illustrative context
- If you had a car financed during that period and felt key terms were not clearly disclosed, you likely fall into the scope of the scheme; the FCA aims to restore fairness and financial relief to millions of drivers.[9][3]
Citations
- FCA announces the motor finance compensation scheme with estimated £7.5bn total redress and average £830 per agreement, with 12.1 million agreements eligible.[3]
- Additional coverage notes that millions could be paid this year as part of the new scheme and outlines detailed eligibility and operational plans.[3]
- The FCA confirms a broader consultation and the scheme’s design to ensure fairness for consumers and proportionality for firms.[8]
- Which? summarizes expected typical payouts around £830 and up-to-date status as of May 2026.[9]