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After almost a decade long wait, the FCA has finally announced a compensation scheme for motorists who were overcharged in their finance agreements when they purchased a vehicle. The scheme rules, which are some 584 pages in length, will come into effect for complaints made by 30 June 2026 for any loans taken out from 1 April 2014 to 1 November 2024 and for complaints made by 31 August 2026 for loans taken out from 6April 2007 to 31 March 201407.
Anyone who has already submitted a complaint by these dates can expect to receive an offer of compensation (if eligible) based on the FCA Schemes calculated formulas within 3 months of those respective dates –i.e. 30 September 2026 and 30 November 2026.
Jamie Patton, Managing Director of Johnson Law Group says:
“This is a long-overdue moment of reckoning for a motor finance industry that has failed millions.
For too many motor finance consumers, hidden commissions and unfair practices have led to years of overpaying in silence.
This redress scheme is a clear indication of the injustice caused by the banks malfeasance over nearly two decades. By implementing such a scheme, the FCA is acknowledging that wrong-doing and finally holding finance companies accountable for the trust they have betrayed.
The hope now is that the scheme rules – lengthy though they are – will offer compensation levels similar to a customer’s legal entitlement, and that lenders will apply the rules of the scheme in good faith. The absence of either of these factors is likely to lead to mass litigation in the courts.”
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