Updated: 17 April 2026

Originally Published: 22 March 2025

If you have had car finance through Close Brothers, you may have started to question what the recent FCA developments mean for you.

The headlines have been consistent. A widespread car finance scandal. Millions of agreements under review. Billions of pounds set aside for compensation.

It is easy to assume this sits at a distance. Something affecting the wider market rather than your own agreement.

However, that assumption is beginning to shift.

For many customers, the issue is no longer abstract. It is specific. It is tied to how their own finance agreement was structured and explained.

So the question becomes more direct.

Can I claim against Close Brothers Finance, and what does that actually involve in 2026?

Why Close Brothers is part of the car finance scandal

When most people think about Close Brothers, they think of a lender rather than a dealership brand.

That distinction matters, but it does not remove them from the wider issue.

Close Brothers finance agreements were commonly arranged through dealerships, meaning they formed part of the same distribution model used across the UK car finance market.

That model relied on a simple structure.

Dealers acted as intermediaries between customers and lenders. They introduced finance options, explained monthly payments, and helped finalise agreements.

At the same time, they were connected to lenders through commission.

That connection is where the problem began.

In many cases:

• the dealer’s earnings were linked to how the finance was structured
• the interest rate could be influenced within a permitted range
• this was not always clearly explained to the customer

This combination created a situation where the cost of finance could be shaped by factors the customer was not aware of.

That is why Close Brothers mis-sold finance claims are now being reviewed alongside those involving other major lenders.

What changed with FCA car finance regulation

Before the FCA stepped in, complaints about car finance were inconsistent.

Some customers successfully challenged their agreements. Others did not. Many cases took months or years to resolve, often with unclear reasoning.

The issue was not just the complaints themselves. It was the lack of a consistent framework.

In 2026, that changed.

The FCA introduced a structured redress scheme that applies across the market [1]. This scheme removes much of the uncertainty by defining:

• how agreements should be assessed
• how compensation should be calculated
• when decisions and payouts should happen

This means a Close Brothers finance claim is no longer handled in isolation. It is assessed using the same criteria applied to millions of agreements.

The scale of the issue and why it matters

One of the most important aspects of the FCA intervention is the scale.

This is not a limited issue affecting a small group of customers.

The FCA estimates:

• 12.1 million agreements are eligible for review
• £7.5 billion in compensation will be paid
• £9.1 billion total cost to lenders

This reflects a systemic issue rather than isolated misconduct.

For customers, this changes the context completely. A Close Brothers claim is not an exception. It is part of a wider correction across the industry.

How the FCA car finance redress scheme works in practice

To manage the scale of the car finance scandal, the FCA has introduced a structured system that divides claims into two groups based on when the agreement was taken out.

Scheme 1

This covers agreements taken out between 6 April 2007 and 31 March 2014.

• Implementation runs until 31 August 2026
• Decisions are typically issued within three months after that point
• Payments are expected shortly after, often moving into early 2027
• Average compensation is around £734 per agreement

This group tends to involve older agreements, where documentation and timelines may be less straightforward, which is why the process runs slightly longer.

Scheme 2

This applies to agreements taken out between 1 April 2014 and 1 November 2024.

• Implementation runs until 30 June 2026
• Decisions are expected by September 2026
• Payments are typically made from late 2026 onwards
• Average compensation is around £881 per agreement

These agreements are more recent, which is why they are expected to be processed earlier and form the bulk of payouts 2026.

This structure allows millions of car finance claims, including Close Brothers finance claims, to be handled consistently across the market.

Final deadline to submit a complaint

Alongside the scheme timelines, the FCA has also introduced a final deadline for bringing a complaint [2].

Customers who have not yet raised a concern about their agreement will generally have until 31 August 2027 to do so.

This means that even if you have not yet started a Close Brothers finance claim, you may still be able to take part in the scheme. However, waiting until the final deadline could result in longer processing times, as earlier claims are expected to be reviewed first.

What customers were not always told

Most people remember the practical details of their finance agreement.

They remember the monthly payment. The deposit. The length of the term.

What they do not always remember is how those numbers were determined.

In many cases, key details were either unclear or not explained at all.

For example:

• whether the interest rate could be adjusted
• how commission was calculated
• whether alternative finance options were available

This lack of clarity is what underpins many car finance mis-selling claims today.

What the FCA considers mis-sold car finance

Rather than leaving this open to interpretation, the FCA has identified specific patterns of behaviour.

These patterns now form the basis of car finance claims, including Close Brothers compensation claims.

Discretionary commission arrangements

This is the most common issue across the market.

Dealers were able to adjust interest rates within a set range. Increasing the rate increased their commission.

The FCA estimates that this type of arrangement accounts for the majority of affected agreements, making it the most widespread issue in the car finance scandal.

Average compensation for these cases is estimated at around £810 per agreement.

Contractual ties between dealer and lender

In some cases, dealerships had preferred relationships with specific lenders such as Close Brothers.

Customers may have been directed toward a particular finance option without a full explanation of alternatives.

The FCA considers this relevant where it influenced the customer’s decision.

These cases account for a smaller proportion of claims, with average compensation estimated at around £807 per agreement.

Excessive or high commission structures

Some agreements involved unusually high commission levels.

These cases are less common, but the financial impact is often greater.

The FCA estimates that where commission exceeded certain thresholds, average compensation can reach £1,200 or more per agreement.

Why these categories matter

These categories are not just technical definitions.

They explain why two similar agreements can lead to very different outcomes.

One customer may receive no car finance compensation. Another may receive several hundred pounds. A smaller number may receive significantly more.

The difference comes down to how the agreement was structured.

What a Close Brothers finance claim actually involves

A common misconception is that making a claim requires detailed knowledge or legal argument.

In reality, the process is much more structured.

You are not expected to prove mis-selling yourself.

Instead, you are asking for your agreement to be reviewed under FCA rules.

That review considers:

• how the agreement was priced
• what information was disclosed
• whether the outcome was fair

From there, the lender determines whether compensation is due.

Starting point: car finance refund check

For most people, the process begins with a car finance refund check.

This is a simple way to assess whether your agreement may qualify.

You do not need detailed paperwork to begin. Basic information is usually enough.

This is why many customers choose to complete a car finance refund check via a finance claims expert of PCP claims website before deciding whether to proceed with a full claim.

What happens after you submit a claim

Once you make a claim the process becomes more formalised.

Your lender will pull your agreement and apply FCA tests to see if it crosses the unfairness threshold.

This takes into account:

• commission
• interest rates
• POS disclosure

You'll be notified of the result along with an explanation of how the decision was made.

Understanding Close Brothers compensation

A Close Brothers refund is not a full repayment of everything you paid.

Instead, it is designed to correct any financial disadvantage caused by the agreement.

This involves:

• identifying the difference between what you paid and what you should have paid
• calculating that difference
• adding interest

This is why compensation varies between cases.

Payouts 2026 and what to expect

The term payouts 2026 refers to when the system begins issuing decisions and payments at scale.

For many claims:

• decisions are expected in late 2026
• payments follow shortly after acceptance

However, not all claims will follow the same timeline.

Timing questions people ask

Questions around timing are some of the most common.

How long does a PCP claim take?

How long does car finance claims take to pay out?

The answer depends on timing and action.

If you submit a claim within FCA timelines:

• Scheme 2 claims are likely to be resolved first
• decisions are expected by September 2026
• payments typically follow within weeks

Scheme 1 claims may take longer, with outcomes extending into early 2027.

If you do not submit a claim:

• the lender may contact you
• the process may take longer
• your timeline may extend beyond those who acted earlier

Frequently Asked Questions

Can I claim against Close Brothers Finance if my agreement has ended?

Yes. A Close Brothers finance claim is based on how the agreement was structured and explained at the time, not whether it is still active.

This means you may still be eligible even if you have already finished paying, settled the agreement early, or no longer own the vehicle. Many of the agreements being reviewed under the FCA car finance scheme are historic, so it is still worth checking.

Are Close Brothers refunding customers automatically?

No. Close Brothers are not issuing a car finance refund or a PCP refund to every customer automatically.

Each agreement is reviewed individually under FCA rules. If your agreement is found to be unfair, you may receive a Close Brothers refund. If it does not meet the criteria, you may not receive compensation.

This is why completing a car finance refund check is often the first step.

How do I know if I can make a Close Brothers claim?

You might be able to make a Close Brothers claim if key elements of your deal were not explained to you.

For example this can include where commission was not disclosed to you, where the interest rate seemed higher than you expected or you were not offered alternative finance options.

You do not need to know exactly what the issue is as the lender will review your agreement according to FCA standards.

What is a Close Brothers PCP claim?

A Close Brothers PCP claim is a claim on a Personal Contract Purchase agreement where the pricing or structure of the deal was not explained to you.

If the structure of the way the agreement was set up means it cost more than you would reasonably expect it would fall within the remit of the FCA scheme and may be compensatable.

How much Close Brothers compensation might I be entitled to?

The precise amount varies as it all depends on the nature of your agreement.

On average, however, payouts across the market have been around £829 [3]. Each case is different, but those who were on higher commission rates and have seen a higher financial impact from their agreements are likely to receive more.

The commission is calculated as the difference between the commission that you actually paid and what you are likely to have paid if you had been in a fair agreement.

Will I get a full refund of my car finance payments?

No – in most cases you will not get a refund of all the payments you have made.

The FCA scheme is intended to put you back in the position you would have been if you had not been mis-sold. It’s not designed to cancel out your agreement. So you will get compensation for the difference in cost, plus interest. It is not a full repayment.

What is Scheme 1 and Scheme 2 of Car Finance Claims?

The FCA has split car finance claims into two categories. These categories are based on the date the agreement was originally started.

Scheme 1 – Between April 2007 and March 2014.

Scheme 2 – Between April 2014 and November 2024.

Scheme 2 claims are expected to be processed first. The majority of Scheme 2 claims are likely to start receiving payments in 2026 from late 2026.

Scheme 1 claims will start receiving payments sometime later, with 2027 being common in some cases.

When is the PCP payout expected?

Payouts 2026 are expected to begin from late 2026 for successful claims.

Most payments are made between late 2026 and early 2027. Cases can take longer to process depending on how they are managed.

How long does it take for car finance claims to pay out?

After a claim is accepted and compensation is agreed, the payment is normally made in a relatively short time.

So if you are asking "car finance claim how long does it take?" This is often a few weeks to one month. However, there may be delays in complex cases or where further checks are needed.

Do I need to have the paperwork to make a claim?

No. Not having your paperwork is not normally a problem.

The lender, for example Close Brothers, will have records of the agreement. This means they can often source the information themselves, including the agreement and payment history.

It is normally enough to have some basic information to start the process.

Can I make a claim on behalf of a deceased person?

Yes. The FCA car finance scheme is applicable where the customer has died, which means their estate may be entitled to compensation.

If you are an executor or beneficiary, you can make a claim on their behalf. Use your own details but please make it clear that you are acting on behalf of the deceased and provide as much information as possible.

Should I make a claim now or wait?

There is no need to do anything if you prefer to wait for lenders to contact eligible customers.

However, the earlier you make a claim the more control you will have and the clearer your timescale is likely to be. If you do wait, it is likely you will eventually be compensated but it will take longer and it’s harder to see how things are progressing.

What happens if my Close Brothers claim is rejected?

If your claim is rejected, you may still have a case to answer.

You can check the lender’s explanation and see if you believe the FCA rules have been applied fairly in your case. If so, you may be able to contest the result or escalate the complaint through appropriate channels.

Final thoughts

The position in 2026 is no longer uncertain. The FCA has introduced a clear framework for reviewing car finance agreements and correcting outcomes where they were not fair.

For Close Brothers customers, this means you do not need to rely on guesswork. There is now a defined process to assess your agreement and determine whether compensation is due.

The next step is straightforward.

Complete a car finance refund check, understand your position, and decide how you want to proceed.

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References:

1. The FCA introduced a structured redress scheme that applies across the market - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
2. the FCA has also introduced a final deadline for bringing a complaint - https://www.fca.org.uk/publication/policy/ps26-3.pdf
3. On average, however, payouts across the market have been around £829 - https://www.dailymail.co.uk/money/cars/article-15691403/FCA-says-12MILLION-829-payouts-car-finance-compensation.html