UK regulator warns car finance firms against low-ball redress offers
BCS•Britain’s financial watchdog warned motor finance lenders that compensation offers must meet at least the maximum redress available under its partly suspended £9.1 billion scheme. Barclays said it would make early settlement offers to some customers using the regulator’s methodology.
1. FCA sets minimum expectations
The Financial Conduct Authority warned motor finance lenders against offering compensation for mis-sold car finance that falls short of the terms of its partly suspended £9.1 billion redress scheme. It said lenders should be able to demonstrate that voluntary offers reflect at least the maximum redress available under the scheme.
2. Barclays plans offers
Barclays became the first UK bank to announce early settlement offers to a pool of customers. It said offers would use the FCA’s methodology and reflect individual loan circumstances; some Barclays Partner Finance customers whose commission complaints had been acknowledged on or before October 1, 2026, would be contacted in the coming weeks.
3. Legal challenges ahead
The FCA’s scheme has been partly suspended ahead of legal challenges expected to be heard next February. The 17-year mis-selling scandal has weighed on an industry that includes Lloyds, Close Brothers and vehicle manufacturers’ finance arms.
