UK Watchdog Ready To Announce National Compensation Scheme As 31m Drivers Could Benefit – Are You One Of Them?

Drivers have been issued a major update amidst the ongoing car finance scandal in the UK, ahead of a looming date in the Supreme Court. 

The Financial Conduct Authority (FCA), the UK’s regulatory watchdog, has released a statement that it is looking at introducing an industry-wide refresh scheme for drivers affected by the car finance scandal.

This all stems from years of high-street banks and lenders, such as Black Horse, Close Brothers and MotoNovo, mis-selling car finance deals to their customers.

These customers were subsequently overpaying hundreds, even thousands of pounds extra for their car finance deals than what they should have been.

In Tuesday’s statement, the FCA has said it intends to do all it can to help consumers recover money back that they may have lost out on.

“Since we launched our review, a ruling by the Court of Appeal has raised the possibility of widespread liability among motor finance firms wherever commissions were not properly disclosed to customers.”

The UK Supreme Court will hear an appeal against the Court of Appeal’s judgment on the 1st of April, that is set to conclude on the 3rd. 

“So, we are confirming that if, taking into account the Supreme Court’s decision, we conclude motor finance customers have lost out from widespread failings by firms, then it’s likely we will consult on an industry-wide redress scheme.”

The car finance mis-selling issue has been dubbed by many as “PPI On Wheels” for its similarities to the notorious PPI scandal.

Collectively, lenders paid out tens of billions in compensation in the PPI mis-selling saga, and it’s estimated that UK drivers could be owed a share of £50bn from mis-sold car finance arrangements. 

“Under a redress scheme, firms would be responsible for determining whether customers have lost out due to the firm’s failings.”

“If they have, firms would need to offer appropriate compensation. We would set rules firms must follow and put checks in place to make sure they do.”

In the last year, drivers have been widely encouraged to lodge a check to see if they were potentially mis-sold their car finance deal and if they too could be owed compensation.

Drivers who took out Personal Contract Purchase (PCP) and Hire Purchase (HP) deals between April 2007 and January 2021 are invited to check for a potential payout. 

Wheelreporter.com has identified a number of free checks that consumers can take advantage of to register their claims with specialist firms.

One of these sites, Finance Claims Expert, has attracted widespread attention for being able to detect drivers’ car finance agreements in as little as 60 seconds, and give them results on their possible claim within the former timeframe.