How will car finance compensation payments work?

millions of drivers mis-sold car finance should get compensation this year, with average payments around £829. the financial conduct authority's scheme covers about 12 million loans taken between april 2007 and november 2024. the issue stems from banned commission deals where dealers got paid more for charging higher interest rates, often without the customer's knowledge. the total cost for the industry, including admin, could hit £9.1bn. four million complaints are already lodged; those people don't need to do anything. others should contact their lender directly, not a claims firm, as the regulator's scheme is free. however, a legal challenge by a consumer group could delay payouts. lenders, including major banks, have set aside billions, though industry bodies argue the scale of losses is implausible. the scheme was shaped by a supreme court test case, which found a finance deal unfair due to a large, undisclosed commission.