Sarah Pritchard

The Financial Conduct Authority (FCA) has been compelled to partially suspend its significant £9.1 billion car finance compensation scheme. This scheme was designed to address overcharging on car loans due to undisclosed commission payments, with an average payout of £830 expected for affected motorists. However, the scheme is now facing substantial delays, potentially pushing payouts back by up to three years. These delays are attributed to a wave of legal challenges from lenders and a consumer claims group, which the FCA has criticized. These challenges not only postpone compensation for millions of drivers but also impose an estimated £6 billion in extra costs on lenders. The situation highlights ongoing complexities and disputes surrounding the resolution of the motor finance scandal.