Millions of Brits have been given a warning over compensation claims. Over 12 million drivers (37% of agreements made) will receive a portion of £7.5 billion after being overcharged for car finance between 2007 and 2024.
People may have been overcharged due to “discretionary commission arrangements” – where dealers were able to increase interest rates to earn more commission from a sale. Many lenders didn’t properly tell customers important information about their agreements. This broke laws and FCA rules in force at the time.
But the Financial Conduct Authority (FCA) has warned Brits not to use claims management firms to make their complaints, or they could end up losing some of their compensation. A firm could take up to 30% of it for helping with the claim.
Instead, there is a free complaint letter template on the FCA website. Sheree Howard, executive director at the FCA, said: “Many people who may be owed compensation aren’t sure where to start or don’t realise they don’t have to pay someone to make a complaint. Our free tools are there to help people feel claim confident – so they can get any money owed back without it costing them a penny.”
The FCA has launched a campaign to help Brits who think they might be entitled to compensation feel more confident in making a complaint. It is running from now until September 6.
The organisation found that 27% of Brits don’t feel confident making a complaint without the help of a claims management organisation, despite the free tools available online. A survey found that 59% of customers have considered making a complaint, but 23% said they are unsure of their options.
Since January 2024, the FCA has had 1,200 misleading car finance claims adverts by claims management companies removed or amended. It challenged 170 in June 2025 alone.
The car finance compensation scheme was launched in March. It has been partially suspended due to legal challenges from lenders but the FCA says it it is planning to fight these.
The case is due to be heard in either December 2026 or February 2027. If the scheme is upheld, and the judgment isn’t appealed, the FCA expect payments under the scheme to begin in 2027.