Up to 14 million people affected by the UK’s car finance issue may receive around £700 each in compensation.
The payments are expected to be lower than initially predicted. However, the Financial Conduct Authority (FCA), which outlined the compensation plans on Tuesday, stated that lenders could face costs of up to £8.2bn, with the total possibly rising to £9.7bn.
The regulator's long-awaited proposals apply to millions of car finance agreements signed between April 2007 and November 2024. The issue stems from claims that some lenders improperly influenced car dealers through hidden commissions, leading many buyers to unknowingly pay more for their loans.
In a consultation document, the FCA noted that, based on estimated participation, lenders might have to pay £8.2bn, though the figure could reach £9.7bn.
Last August, the FCA suggested most individuals would likely receive less than £950 per agreement. At the time, it indicated the total cost would probably not fall below £9bn and could rise as high as £18bn.
Most new vehicles and a growing number of used cars are acquired through finance deals, usually involving personal contract purchases or hire purchase agreements. Annually, around 650,000 such agreements are made for new cars alone.
If implemented, this would be the largest mass compensation linked to financial products since the issue with payment protection insurance (PPI), which saw 34 million people receiving roughly £1,000 each.
Read next
"Nations weigh halting Russian oil and gas purchases as Trump sanctions take quick effect"
Donald Trump’s efforts to mediate peace in Ukraine may hinge on one critical issue: can the U.S. leader persuade nations to reduce their reliance on Russia’s energy exports?
Recently, Trump introduced sanctions against two of Russia’s biggest oil firms, Rosneft and Lukoil, aiming to weaken Moscow’
"Risks of centrist economics in a divided world"
Navigating the economic landscape as a centrist thinker is challenging in today’s politically charged environment, where every viewpoint is quickly categorized into rigid ideological positions. A sentiment often linked to Leon Trotsky applies here—centrist economists may avoid conflict, but conflict finds them regardless.
Take, for example, my 2016
"Bloomsbury head suggests AI aids writers in overcoming block"
Artificial intelligence may assist authors in overcoming creative hurdles, according to the head of the publishing company Bloomsbury.
Nigel Newton, founder and chief executive of the firm behind the *Harry Potter* series, suggested that while AI could support various creative fields, it would not replace well-known writers entirely.
"AI