Business · Companies · 1 hr ago
Barclays to offer early payments to some mis-sold car loan customers
Barclays will offer early compensation to some car finance customers who previously complained about commission on their loans.
The offers come as the Financial Conduct Authority’s industry-wide compensation scheme faces a legal challenge, due to be heard in February.
Customers will have a month to accept or reject an offer, and the FCA says no one has to accept.
Any offer must be at least as good as the scheme’s payout for that customer.
The dispute concerns loans taken out from April 2007 to November 2024, when some dealers received commission linked to customers’ interest rates without telling them.
About 12 million loans may qualify, with average compensation estimated at about £829.
Most customers are expected to wait for the court outcome before lenders pay under the scheme; any payments could follow months later.
Barclays will begin offering early compensation to some customers who complained about mis-sold car finance.
The offers come while legal challenges have delayed the Financial Conduct Authority’s industry-wide compensation scheme.
Customers will have a month to accept or reject an offer, which must be at least as much as the amount due under the FCA scheme.
Those who accept cannot later seek additional compensation or make further claims over the same commission.
The court hearing on the scheme is due in February, and the outcome could affect when other payments are made.
- Who
- Barclays Partner Finance customers who have already complained about commission on their car finance agreements.
- What
- Barclays is offering early compensation settlements for some mis-sold car loans.
- When
- Offers are due to start in November 2026. Customers will have a month to respond.
- Where
- The UK.
- Why
- Legal challenges have delayed the FCA’s compensation scheme, and Barclays is offering some customers the option of receiving redress sooner.
Financial Conduct Authority
Financing and Leasing Association
Timing of payments
Financial Conduct Authority
The FCA welcomes firms offering early settlements, provided customers receive no less than they would under its scheme.
Financing and Leasing Association
The FLA says settling early risks giving consumers an outcome that may not reflect the final position after the legal challenges.
Customer impact
Financial Conduct Authority
The FCA says early offers could give some people money sooner, while customers can choose to wait.
Financing and Leasing Association
The FLA says delaying payments may leave people who suffered harm waiting longer for redress.
The FCA announced a £9.1bn compensation scheme for people affected by the car finance scandal.
Barclays confirmed it would begin making early settlement offers to some customers who had complained.
A court hearing on the legal challenges to the FCA scheme is due to go ahead.
- Barclays offers
- Early settlements for some customers who previously complained
- Response period
- One month to accept or reject an offer
- FCA scheme
- £9.1bn
- Expected average compensation
- About £829
- Affected loans
- About 12 million car loans from April 2007 to November 2024
4 sources
Car finance: Barclays becomes first big lender to offer payouts for mis-selling of loans
Drivers mis-sold car loans may get payouts while regulator scheme is challenged
Barclays to offer early compensation payouts to motorists stung by car finance scandal
Drivers may get compensation offers before car finance saga ends
What people are saying
Fair settlement offers could result in some people getting money sooner. It's clear they want the choice.
We’ll closely monitor firms making offers and expect them to be clear what accepting an offer means.
By making these early settlement offers, we are giving some customers the option of receiving redress sooner, rather than waiting for the legal challenges and any subsequent FCA action to conclude.
On the other hand, rushing to settlement risks consumers receiving an outcome that may not reflect the final position once the ongoing legal challenges have been determined.