FCA Opens Door to Early Car-Finance Compensation Offers

What changed

The Financial Conduct Authority has opened the door to early compensation offers for drivers caught up in the car-finance mis-selling saga. Barclays says it will begin making offers now, while most claimants are expected to wait for a court challenge to the FCA’s proposed scheme, due to be heard in February.

The dispute concerns car loans taken out between April 2007 and November 2024, involving undisclosed discretionary commission arrangements. About 12 million loans may qualify, with average compensation expected to be about £829.

Why it matters

Some drivers could receive money sooner, but accepting an offer will be a choice, not a requirement. The FCA says lenders must not leave customers worse off than they would be under its proposed scheme, and it will monitor how clearly firms explain the consequences of accepting.

That safeguard matters because the final value and timing of individual payments remain unsettled. The court case could delay most compensation until late 2027, so an early offer may appeal to people who would rather settle sooner. Others may prefer to wait for the scheme’s outcome.

The practical question for affected drivers is simple: does the offer match what they might receive later, and what rights disappear when they accept it? The FCA’s position is that customers should have enough clarity to make that decision.