Updated: 30 July 2026

Originally Published: 22 March 2025

If you took out Close Brothers car finance, you've probably seen headlines about the UK's car finance scandal and wondered whether they apply to you.

Over the past two years, the investigation into historic motor finance agreements has grown into one of the UK's largest consumer redress programmes. The Financial Conduct Authority (FCA) believes millions of agreements may have been affected by commission arrangements and other practices that were not always clearly explained to customers.

Close Brothers is one of several major lenders whose agreements could fall within the scope of the FCA's proposed compensation scheme.

Since our last update, there have been significant developments. The FCA has published its final redress proposals, several organisations have launched legal challenges through the Upper Tribunal, and compensation payments that were expected to begin during 2026 are now widely expected to be delayed until 2027, subject to the outcome of those proceedings.

If you're wondering can I claim against Close Brothers Finance, this guide explains everything you need to know, including:

• why Close Brothers is involved in the FCA investigation
• who may be eligible to make a Close Brothers finance claim
• the latest compensation and legal updates
• whether Close Brothers are refunding customers yet
• what the current delays mean for motorists
• where to find more detailed guidance on making a claim

Whether you're looking for a Close Brothers refund, researching PCP finance claims, or simply trying to understand what the latest FCA announcements mean for you, this guide brings together the latest information in one place.

What's Changed Since Our Last Update?

A lot has happened since this guide was last updated in April 2026.

At that point, the FCA had confirmed its proposed industry-wide compensation scheme for eligible motorists [1]. Since then, however, several important developments have changed the expected timeline for car finance claims.

The biggest change is that parts of the FCA's proposed redress scheme are now subject to legal challenges. Consumer group Consumer Voice, along with lenders including Mercedes-Benz Financial Services, Volkswagen Financial Services and Crédit Agricole Auto Finance, have challenged aspects of the FCA's methodology through the Upper Tribunal [2].

As a result, the Tribunal has granted a partial suspension of the scheme while those legal proceedings continue [3].

For consumers, this does not mean the compensation scheme has been cancelled.

Instead, it means some elements of the process have been temporarily paused while the Tribunal considers whether changes should be made before compensation is paid.

The FCA has made it clear that firms should continue preparing wherever possible. Lenders can still review historic agreements, maintain records and prepare their systems so they are ready to implement the scheme if it proceeds as proposed.

Because of these developments, compensation payments that were previously expected to begin during the second half of 2026 are now widely expected to begin during 2027, although the exact timetable will depend on the outcome of the legal proceedings.

The FCA has also warned motorists to be cautious of misleading advertising. During 2026, it worked with other regulators to remove around 170 promotions that gave consumers unrealistic expectations [4] about car finance compensation or failed to make clear that complaints can be made directly to lenders without using a claims management company.

However, all these delays have not altered the broad view. The FCA still estimates that there could be approximately 12.1 million historic motor finance agreements in scope of its proposed scheme, with around £7.5 billion in total being paid to eligible consumers if implemented [5].

For anyone considering a Close Brothers mis-sold finance claim, the key message is simple: the timetable has changed, but the investigation is still very much ongoing.

Why Is Close Brothers Part of the Car Finance Scandal?

Close Brothers is one of several major lenders whose historic motor finance agreements are being examined as part of the FCA's investigation into car finance mis-selling.

Although many motorists arranged their finance through a dealership, the lender played an important role behind the scenes. Close Brothers provided the finance, while dealerships introduced customers to the available finance options and completed the agreement.

For many years, this was a standard way of buying a car in the UK. Most customers focused on choosing the right vehicle and finding a monthly payment that suited their budget. Few stopped to question how the finance had been arranged or whether the dealership received commission for introducing the agreement.

That changed when concerns emerged about how some commission arrangements operated and whether customers had been given enough information to make an informed decision.

The FCA's investigation doesn't suggest that every Close Brothers agreement was unfair or that every customer is entitled to compensation. Instead, it looks at whether some finance agreements may have cost consumers more because important information about commission or the way the finance was arranged wasn't made clear.

Like several other lenders, Close Brothers has become closely associated with the wider car finance scandal because many of its agreements fall within the period covered by the FCA's proposed redress scheme.

The investigation covers millions of historic motor finance agreements taken out between 6 April 2007 and 1 November 2024, including Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements that may have involved commission arrangements or other practices now under regulatory scrutiny.

It should also be remembered that Close Brothers are not being assessed in a vacuum by the FCA. The proposed compensation scheme covers much of the motor finance industry and includes agreements provided by several well-known lenders. The idea is to standardise the approach to assessing car finance or PCP car claims, including mis-sold PCP car finance claims, rather than have a different process for every lender.

For many motorists, this means the question is no longer whether Close Brothers is part of the investigation, but whether their own agreement could fall within the FCA's proposed scheme.

If you're unsure how the investigation developed, what commission arrangements were involved or why the FCA decided to introduce an industry-wide compensation scheme, read our detailed guide:

→ What Is the Close Brothers Scandal? Key Facts and Compensation Explained

There, we explain the background to the investigation, the key legal developments and how the proposed compensation scheme is expected to work.

What Went Wrong With Some Close Brothers Finance Agreements?

For many motorists, taking out car finance was a straightforward process. The focus was usually on choosing the right car, agreeing an affordable monthly payment and driving away as soon as possible.

The finance agreement itself often received far less attention.

Years later, as the FCA began investigating historic motor finance practices, some consumers started asking whether they had been given enough information before signing their agreement.

The investigation isn't about whether PCP car finance or Hire Purchase agreements were inherently unfair. Nor does it suggest that lenders shouldn't pay commission to dealerships. Commission has long been a common part of the motor finance industry.

Instead, the FCA's concerns centre on transparency.

In some cases, customers may not have been clearly told that a dealership would receive commission for arranging their finance. Others may not have understood how that commission worked, whether it could influence the overall cost of borrowing or whether alternative finance options were available.

The FCA has identified several practices that may have contributed to mis-sold car finance, including:

• commission arrangements that weren't properly disclosed
• interest rates that may have been influenced by commission structures
• limited transparency about how finance options were selected
• insufficient information to help customers make an informed decision

Not every Close Brothers agreement involved these issues, and not every customer will be entitled to Close Brothers compensation. Each agreement will be considered on its own facts under the FCA's proposed redress scheme.

For many consumers, this represents a change in perspective. When they bought their car, the finance agreement was simply a way to spread the cost. Today, many are revisiting those same agreements to understand whether they were given all the information they should reasonably have expected at the time.

As awareness of car finance claims continues to grow, more motorists are taking the opportunity to review agreements they may not have looked at for years.

If you'd like to understand the different commission arrangements, how the FCA assesses potential car finance mis-selling, and why these issues became the focus of the investigation, read our detailed guide:

→ What Is the Close Brothers Scandal? Key Facts and Compensation Explained

There, we explain the background to the investigation and the different types of commission arrangements in more detail.

Can I Claim Against Close Brothers Finance?

If you're asking, "Can I claim against Close Brothers Finance?", the answer is that you may be able to, depending on the circumstances of your agreement.

The FCA has not said that every Close Brothers customer is entitled to compensation. Instead, each agreement will be reviewed individually to determine whether it falls within the scope of the proposed redress scheme and whether the customer may have experienced a financial disadvantage.

While every case is different, you may wish to consider a Close Brothers finance claim if:

• you took out a Close Brothers PCP or Hire Purchase agreement during the period covered by the FCA's proposed scheme
• you weren't clearly told that the dealership would receive commission
• you didn't fully understand how your finance agreement had been arranged
• you believe important information wasn't explained before you signed the agreement

Importantly, you may still be able to make a Close Brothers claim even if:

• you've paid off your finance
• you've settled the agreement early
• you've sold or traded in the vehicle
• you no longer have the original paperwork
• the dealership where you bought the car has since closed

Many people are now reviewing agreements they entered into several years ago, so it's common not to remember every detail or still have copies of the original documents.

If you're unsure whether your agreement could be affected, a car finance refund check or PCP claim check can help you understand whether it may be worth investigating further or if you are eligible for a PCP compensation claim. A finance claims expert may also be able to help explain your options, although you're free to complain directly to the lender if you prefer.

Want to Know How to Make a Close Brothers Claim?

If you'd like detailed guidance on the claims process, including what information you may need, the different ways to make a claim and what happens after you submit one, read our dedicated guide: → How to Claim Against Close Brothers Finance

It explains the process step by step and answers many of the practical questions motorists have when starting a claim.

Latest FCA Compensation Update for Close Brothers Customers

If you're thinking about making a Close Brothers finance claim, you're probably wondering what happens next and when compensation could actually be paid.

The biggest change since many motorists first started hearing about the car finance scandal is that the FCA has now confirmed its proposed compensation scheme, but the expected timetable has changed.

Although the regulator has set out how eligible customers could receive car finance compensation, ongoing legal challenges mean compensation payments are now expected to take longer than originally anticipated.

Why Has Compensation Been Delayed?

In March 2026, the FCA published its final proposals for an industry-wide redress scheme covering eligible motor finance agreements entered into between 6 April 2007 and 1 November 2024.

The scheme was designed to provide a consistent approach to reviewing agreements and calculating compensation where customers had suffered a financial disadvantage.

However, shortly after the proposals were published, several organisations challenged parts of the FCA's methodology through the Upper Tribunal.

As a result, elements of the scheme have been partially suspended while those legal proceedings continue.

For motorists, the important point is that the scheme has been delayed rather than cancelled. The FCA has made it clear that it remains committed to introducing a fair and consistent compensation process once the legal issues have been resolved.

Are Close Brothers Refunding Customers?

Not at the moment.

If you're asking "Are Close Brothers refunding?", the answer is that the lender is not currently making compensation payments under the FCA's proposed redress scheme.

That doesn't necessarily mean your agreement won't qualify in the future. Instead, the legal challenges mean lenders must wait until there is greater certainty about how the final scheme will operate before compensation can be calculated and paid.

In the meantime, Close Brothers, like other lenders, is expected to continue preparing by reviewing historic agreements and getting its systems ready for the next stage of the process.

Can I Still Make a Claim?

Yes.

The current delays don't stop you from exploring your options or checking whether your agreement may fall within the scope of the FCA's proposed scheme.

Many motorists are choosing to complete a car finance refund check or PCP claim check now so they have a better understanding of their position while the regulatory process continues.

Whether you choose to complain directly to the lender or seek support from a finance claims expert, it's sensible to stay informed rather than wait until compensation payments begin.

How Long Does a PCP Claim Take?

One of the most common questions motorists ask is "How long does a PCP claim take?"

At the moment, there isn't a simple answer.

The timing depends on several factors, including the outcome of the Upper Tribunal proceedings, any changes made to the FCA's proposals and when the regulator confirms the final implementation timetable.

If you're searching for "car finance claim how long does it take", it's worth remembering that the current delays affect the entire industry rather than individual lenders. Close Brothers customers are in the same position as motorists with many other finance providers.

When Is the PCP Payout Expected?

Another frequently asked question is "When is the PCP payout?"

Before the legal challenges, many commentators expected compensation payments to begin during the second half of 2026.

However, following the partial suspension of the scheme, widespread PCP refunds and other car finance compensation payments are now widely expected to begin during 2027, although the exact timetable will depend on the outcome of the Tribunal proceedings and any subsequent FCA announcements.

Until then it is sensible to be wary of sites or adverts that purport to know exactly when payment will be made or offer guaranteed dates of payout. The FCA has already taken action against promotions which gave unrealistic expectations over PCP claims and car finance claims.

What Should Close Brothers Customers Do Now?

While the timetable has changed, there are still practical steps you can take.

You may wish to:

• check whether your agreement could fall within the FCA's proposed scheme
• gather any finance documents or information you still have
• keep up to date with FCA announcements and Tribunal developments
• understand your options before compensation payments begin

The legal challenges have slowed the process, but they haven't changed the fact that millions of historic agreements are still expected to be reviewed.

For many motorists, staying informed now will make it easier to understand what happens when the next stage of the FCA's compensation scheme begins.

How Much Could Close Brothers Compensation Be?

One of the first questions people ask after learning about the car finance scandal is how much they could receive if their claim is successful.

The truth is that there isn't a standard Close Brothers compensation payment. Every agreement is different, and any compensation will depend on the individual circumstances of your finance agreement and how the FCA's final redress methodology is applied.

The FCA has said the payout should reflect the financial loss each individual customer suffered, not that everyone will get the same amount of compensation. Circumstances that may affect this amount are:  

• the type of finance agreement, such as PCP or Hire Purchase
• how the agreement was arranged
• the commission structure involved
• the interest charged
• the overall financial disadvantage identified during the review

FCA Estimates

In its announcement of its proposed redress scheme, the FCA initially thought that about 12.1 million motor finance agreements were in scope, with an estimated £7.5 billion to be paid in total to consumers across the industry.

The regulator also estimated that the average compensation payment could be around £829 [6], although this is an industry-wide average rather than a guaranteed amount.

Some motorists may receive more, some less, and others may not qualify for compensation at all. It will depend on the facts of their individual agreement and the outcome of the FCA's review process.

Beware of Guaranteed Refund Claims

If you've seen adverts promising a specific Close Brothers refund or guaranteeing a particular PCP refund, it's worth approaching those claims with caution.

At this stage, no lender, solicitor or claims management company can accurately predict what an individual customer will receive before their agreement has been reviewed under the FCA's final framework.

For most motorists, the first priority should be understanding whether their agreement may be eligible, rather than trying to estimate the value of any potential compensation.

Want to Learn More About How Compensation Is Calculated?

If you'd like a more detailed explanation of how Close Brothers compensation may be worked out, including the different types of commission arrangements, examples of how redress could be calculated and why payouts vary from one agreement to another, read our dedicated guide: → What Is the Close Brothers Scandal? Key Facts and Compensation Explained

It explains the FCA's proposed compensation methodology in greater detail and explores the wider investigation into historic Close Brothers finance agreements.

Frequently Asked Questions About Close Brothers Finance Claims

Can I still make a Close Brothers finance claim if I've paid off my agreement?

Yes.  Even if you've paid off your finance, paid off the agreement early or don't own the car any more, you may still be able to make a Close Brothers finance claim. The FCA's proposed scheme is concerned with how the agreement was set up, not whether it still exists today. If you're not sure whether your agreement may be impacted, a car finance refund check will tell you what your options are.

What happens if I've sold/traded in the vehicle?

Selling or part-exchanging your vehicle doesn't automatically prevent you from making a Close Brothers claim. The review relates to the finance agreement itself, not whether you still own the car. Many motorists exploring PCP claims today no longer have the vehicle they originally financed.

Can I claim if my finance agreements are missing?

Yes. Many people no longer have copies of agreements they signed several years ago, and that doesn't necessarily stop them from pursuing a claim. In many cases, lenders can locate historic records using information such as your name, previous address or approximate date the agreement was taken out.

Is Close Brothers refunding customers automatically?

Not at the moment. Compensation payments under the FCA's proposed scheme have been delayed while legal challenges are considered by the Upper Tribunal. If the scheme proceeds, lenders are expected to contact customers who may be eligible, but the final process and timetable are still subject to the outcome of those proceedings.

Is PCP included in the FCA's compensation scheme?

Yes. Eligible Personal Contract Purchase agreements may fall within the FCA's proposed redress scheme, alongside Hire Purchase agreements. However, not every PCP claim will result in compensation. Each agreement will be assessed individually based on the circumstances in which it was arranged.

Do I need a claims management company or a solicitor to assist with my claim?

No, you can make your complaint to Close Brothers yourself if you wish to do so. Some drivers have instructed a solicitor or claims management company to help them, but others represent themselves. It's whatever works best for you and your situation.

What happens if my Close Brothers claim is unsuccessful?

If your complaint isn't upheld, you'll normally receive an explanation of the decision. Depending on the circumstances and the FCA's final arrangements, you may still have the option of referring your complaint to the Financial Ombudsman Service if you're eligible to do so.

Is every Close Brothers customer entitled to compensation?

No. The FCA has never suggested that every agreement involved mis-sold car finance. Each case will be assessed individually to determine whether the customer may have suffered a financial disadvantage or whether important information wasn't properly disclosed before the agreement was signed.

When is the PCP payout expected?

Motorists are inquiring “when is the PCP payout?” The FCA aimed for payouts 2026 or for payouts to start sooner; however, ongoing legal disputes have postponed the implementation of the proposed scheme. Although no specific date for payments has been confirmed, the broad expectation for the start of PCP refunds is now during 2027, subject to the outcome of the Upper Tribunal process and any amendments to the FCA's plans.

Final Thoughts

The Close Brothers finance claim process continues to evolve as the FCA works towards introducing an industry-wide compensation scheme for eligible motorists.

Legal action may have slowed things down but it has not put an end to the investigation. FCA still wants to provide a fair and uniform treatment in the way it assesses historic motor finance agreements and there are potentially millions of motorists that could be impacted.

If you had a Close Brothers PCP or Hire Purchase agreement between 2007 and 2024, now is a good time to understand your options, check whether your agreement may be eligible and keep up to date with the latest FCA announcements.

As new regulatory developments emerge, we'll continue updating this guide to provide the latest information on Close Brothers compensation, car finance claims and the wider FCA car finance investigation.

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References:

1. the FCA had confirmed its proposed industry-wide compensation scheme for eligible motorists - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
2. Consumer group Consumer Voice, along with lenders including Mercedes-Benz Financial Services, Volkswagen Financial Services and Crédit Agricole Auto Finance, have challenged aspects of the FCA's methodology through the Upper Tribunal - https://consumervoice.uk/cars/fca-car-finance-compensation-challenge/
3. the Tribunal has granted a partial suspension of the scheme while those legal proceedings continue - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended
4. During 2026, it worked with other regulators to remove around 170 promotions that gave consumers unrealistic expectations - https://www.thesun.co.uk/money/39776013/regulator-launches-car-finance-crackdown/
5. The FCA still estimates that there could be approximately 12.1 million historic motor finance agreements in scope of its proposed scheme, with around £7.5 billion in total being paid to eligible consumers if implemented - https://www.fca.org.uk/publication/policy/ps26-3.pdf
6. The regulator also estimated that the average compensation payment could be around £829 - https://www.bbc.com/news/live/czx94evl5lrt