The Bank of Ireland has significantly increased its estimated liability for historic motor-finance mis-selling, raising its provision from approximately £143 million to about £350 million [1]. The move signals the scale of the emerging wave of car finance claims as the regulator’s proposed redress scheme casts a wide net across millions of contracts. Driven by the Financial Conduct Authority (FCA)’s consultation and the potential for large-scale payouts, the bank warned that its final cost will depend on actual opt-in rates, tracing of customers, and any further legal or regulatory developments.

What lies behind the increased provision

Bank of Ireland’s decision to more than double its provision underlines the severity of the broader car finance scandal gripping the UK motor-finance industry. The lender flagged that under the proposed scheme, it anticipates a higher number of eligible cases.

Analysts warn that the industry is bracing for the biggest consumer-redress event since the PPI mis-selling saga. Indeed, one report calculates that the UK’s motor-finance market could face an £8–11 billion cost [2]. This has prompted several lenders to increase their provisions.

As these costs come into view, those with historic car-finance contracts may find themselves in the middle of large-scale car finance mis-selling claims review; if you suspect you may be entitled to compensation, this is a moment to act.

FCA consultation and proposed redress scheme

On 7 October 2025 the FCA launched a formal consultation on an industry-wide consumer redress scheme for unfair motor-finance agreements [3].

Here are the key details:

Scope and timeframe

• The scheme would cover regulated motor-finance agreements taken out between 6 April 2007 and 1 November 2024.
• The FCA has estimated that approximately 14.2 million agreements (about 44% of eligible deals since 2007) could be in scope [4].

Mechanics & average redress

• According to the FCA, many consumers impacted by this will receive, on average, around £700 per agreement.
• The scheme is designed to be free to access. Consumers can complain directly to their lender or wait for the FCA-run scheme.
• The consultation remains open until 18 November 2025.

Why this scheme matters for you

• If your car finance agreement falls within the timeframe (2007–2024) and includes features such as undisclosed commission or a tied arrangement between lender and dealer, you may be eligible under the scheme.
• The FCA emphasises that complaints already lodged may be processed sooner once the scheme launches.
• Importantly, if you haven’t contacted your lender yet, doing so now helps ensure your case is logged and ready when the scheme starts.

What’s more, the scheme may mean that a large number of individuals will make PCP claims (Personal Contract Purchase) or hire-purchase claims under this banner of car-finance mis-selling.

Considering the services of a claims management company

With the scale of this impending redress initiative, many consumers are considering whether to engage a claims management company. If you’re thinking along these lines, here are things to bear in mind:

• The FCA has made clear that you do not have to use a third-party. You can submit your own complaint to your lender or call the proposed scheme your route.
• If you choose a claims management company, check whether the terms are no win, no fee.
• Ensure the firm specialises in car finance mis-selling claims or PCP claims, and understands the nuances of the proposed scheme. One of the best car finance claims companies is Reclaim247 which offers to help trace your history and submit complaints on your behalf with minimal paperwork.

What Should You Do Now?

The regulator has now proposed an industry-wide compensation scheme for unfair car finance agreements between April 2007 and November 2024, with average payouts expected to be around £700 per agreement. You can still choose to complain directly to your lender, go to the Financial Ombudsman Service, or wait for the FCA’s redress scheme, expected to begin in 2026: all of which are free to do.

Why take action now?

• If you’ve already complained, you’ll be in the queue to be contacted once the FCA scheme begins.
• Lenders are only required to contact customers they can trace. If you’ve moved or your old details have changed, it’s worth ensuring your complaint and contact info are up to date.
• Complaining now also means your case is already logged and ready for review when the scheme starts.
• If you haven’t complained yet, Reclaim247 can help trace your finance history and submit a complaint on your behalf, using just your name, address, and date of birth. No paperwork. No hassle. No win, no fee.

Conclusion

The unveiling of the proposed redress scheme by the FCA, covering millions of historical motor-finance agreements, marks a pivotal moment in the UK’s fight against the widespread car finance mis-selling scandal. With a major lender like Bank of Ireland more than doubling its provision in anticipation of mass claims, now is the time for anyone who may have been affected to check their finance agreements, confirm whether they fall inside the scope (between April 2007 and November 2024), and consider lodging a complaint or engaging a specialist. Whether you act now by contacting your lender, opting into the scheme once live, or seeking help from a claims management company, this is likely one of the largest-ever consumer compensation drives in the UK financial sector and one that could finally deliver justice to many who were unfairly charged.

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References:

1. The Bank of Ireland has significantly increased its estimated liability for historic motor-finance mis-selling, raising its provision from approximately £143 million to about £350 million - https://www.thetimes.com/business-money/companies/article/bank-of-ireland-more-than-doubles-car-finance-mis-selling-provision-lg8n392mk
2. one report calculates that the UK’s motor-finance market could face an £8–11 billion cost - https://www.reuters.com/sustainability/uk-motor-finance-industry-faces-11-13-bln-redress-scheme-under-regulators-plans-2025-10-07/
3. On 7 October 2025 the FCA launched a formal consultation on an industry-wide consumer redress scheme for unfair motor-finance agreements - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
4. The FCA has estimated that approximately 14.2 million agreements (about 44% of eligible deals since 2007) could be in-scope - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme