Mis-sold car finance means millions of motorists qualify for £829 payout.

The Financial Conduct Authority has published a compensation scheme covering 12.1 million mis‑sold car finance agreements, with average payouts of £829 and an expected industry cost of £7.5 billion.

The Financial Conduct Authority (FCA) has published a compensation scheme for car finance deals that included undisclosed commission arrangements. The scheme covers 12.1 million agreements made between April 6, 2007 and November 1, 2024. The FCA says average payouts will be £829 and that the industry cost is expected to be about £7.5 billion. Payouts are expected to begin this year and lenders have been given time to set up the scheme. Key facts: - The FCA has set out a redress scheme for discretionary commission arrangements that were stopped by regulators in 2021. - 12.1 million agreements are eligible, with an average payout of £829 and an estimated industry cost of £7.5bn. - The scheme separates redress into two tracks for loans taken before and after April 1, 2014, and lenders are expected to respond within three months of launching their scheme. - The FCA gave lenders until the end of August to organise implementation and said many will begin payouts sooner; the watchdog also expects firms to contact customers who have not complained. Summary: The scheme aims to return money to motorists who were affected by undisclosed commission arrangements and to provide a standard process for redress. Lenders are now responsible for implementing the schemes and making contact with eligible customers, with implementation timelines set by the FCA and payouts expected to begin this year.