Updated: 14 April 2026

Originally Published: 24 March 2025

The UK car finance scandal has now moved beyond investigation and into a formal compensation process.

If you used Clydesdale Partner Finance to fund a vehicle, your agreement may now be included in the Financial Conduct Authority’s official redress scheme [1]. This applies to a wide range of agreements arranged through dealerships, including both hire purchase and PCP.

The one thing that has changed since 2025 is certainty. The FCA has confirmed where commission structures were not properly disclosed, the lender-customer relationship could be considered unfair. This provides a specific legal and regulatory basis for car finance claims. Within this guide we explain how the 2026 FCA car finance scheme works with Clydesdale finance, define mis-sold car finance, calculate compensation and explain what to expect from a car finance claim.

Is Clydesdale Partner Finance included in the FCA car finance scheme?

Yes. Agreements involving Clydesdale finance Barclays are included within the scope of the FCA scheme where they meet the eligibility criteria.

This can include agreements described as:

• Clydesdale Bank car finance arranged through a dealership
• A Clydesdale Bank car loan used to spread the cost of a vehicle
• Clydesdale Bank PCP or other PCP agreements
• Agreements connected to Barclays Clydesdale Finance or similar branding

The scheme applies to agreements:

• Entered into between 6 April 2007 and 1 November 2024
• Used for personal vehicles rather than business use

Importantly, eligibility is not affected by whether the agreement is still active. You may still be able to pursue a car finance refund even if the loan has been repaid or the vehicle has been sold.

Why Clydesdale car finance PCP agreements are being reviewed

The FCA’s investigation found that many lenders across the UK relied on commission structures that were not clearly explained to customers [2].

In practice, this often meant:

• A dealer or broker received commission from the lender
• That commission was linked, directly or indirectly, to the structure of the deal
• The customer was not given a clear explanation of how this worked

The FCA approach assumes an agreement may be unfair where commission or lender relationships were not properly disclosed, unless the lender can show otherwise. This is not something the customer has to prove in detail. The FCA approach starts from the assumption that inadequate disclosure creates unfairness, unless the lender can demonstrate otherwise.

This principle underpins the current wave of car finance claims and applies across lenders, including Barclays Partner Finance Clydesdale.

The three types of mis-sold car finance under FCA rules

The FCA has defined three main categories of car finance mis-selling. An agreement only needs to fall into one of these categories to be considered potentially eligible for compensation.

Discretionary commission arrangements

This is the most common type of mis-sold car finance.

Prior to January 2021, the majority of dealerships could mark up (change) the interest rate offered to a customer by an agreed amount. The higher the rate the more commission the dealer would get.

In many cases, the customer was not informed that:

• The dealer had the power to increase the interest rate
• The higher the rate, the higher the dealer’s commission

This represented a very clear conflict of interest. It also meant some customers may have been overpaying for their finance.

This category represents the largest share of car finance claims across the UK.

High commission arrangements

Some agreements involved particularly high levels of commission, even where the interest rate itself was fixed.

The FCA defines a high commission arrangement as one where:

• Commission was 39 percent or more of the total cost of credit
• And at least 10 percent of the total loan amount

These cases are treated more seriously because of the scale of the commission involved. They are also more likely to result in higher levels of car finance compensation.

Contractual ties between broker and lender

Sometimes brokers or dealerships were in a contractual situation that constrained which lenders they could offer to their customers.

This might be:

• An exclusive deal with one lender only
• A first right of refusal
• A clear bias towards one lender that wasn't disclosed

If the customer was not made aware of this, and was led to believe they were getting a wide market comparison, then the agreement could be seen as unfair.

There are exceptions. Where the relationship between dealer and lender was obvious, such as a manufacturer linked finance provider, the FCA may consider this acceptable.

Who is eligible for a Clydesdale Partner Finance claim?

Eligibility criteria is actually one of the easiest parts. Its simpler than most people realise.

You could be entitled to car finance compensation if:

• Your agreement dates fall within the FCA dates
• The finance was arranged by a dealership/broker
• Commission was not explained at the time
• How the deal was structured could have impacted what you paid

You don’t need to know how commission was calculated in your specific case. The FCA approach works on the basis that if key information such as commission or lender ties were not disclosed, then the agreement may be unfair.

When you may be less likely to qualify

Some agreements are less likely to meet the FCA threshold for mis-selling.

This may include:

• Commission below £120 before April 2014 or £150 after
• Agreements where no interest was charged
• Cases where the lender can show the outcome would not have changed
• Situations where no financial loss occurred

These are not automatic exclusions, but they are important when carrying out a car finance refund check.

How large is the car finance redress scheme?

Possibly the most significant announcement from the FCA is the confirmed size of the redress scheme.

This is not a niche problem that will only affect a small number of people. It is one of the largest consumer financial compensation programmes in UK history.

The FCA now estimates:

• 12.1 million agreements will be eligible for review
• Total redress payments are expected to reach £7.5 billion [3]
• Total costs to lenders, including administrative and operating costs, will be around £9.1 billion

These calculations are based on an estimated 75 per cent participation rate by customers. This means the FCA expects some, but not all, eligible people to make a claim.

How to carry out a car finance refund check

You do not need detailed knowledge of finance or legal rules to get started.

A car finance refund check is simply a way of confirming whether your agreement is likely to fall within the FCA scheme.

You can begin by checking:

• When your agreement started
• Whether it was PCP or hire purchase
• Whether it was arranged through a dealership
• How clearly the finance was explained to you

You do not need to know whether commission was involved. That is something the lender must assess.

Many people choose to complete a car finance refund check online using a claims management company such as Reclaim247. This allows you to check eligibility quickly using basic details, without needing your full paperwork. If your agreement is likely to fall within the FCA scheme, you can then decide whether to proceed.

What if you do not have your paperwork?

This is one of the most common questions and it should not prevent you from looking into a claim.

You can still claim even if you don’t have the original agreement or paperwork.

Lenders are required to keep records of your finance. They should be able to provide:

• Copies of your agreement
• Details of your rate and payments
• How the deal was structured

For most cases, basic information (name, rough date and vehicle) is sufficient to start.

The FCA scheme is designed to work even where paperwork is incomplete. You are not expected to reconstruct the agreement yourself.

Scheme 1 and Scheme 2 explained

To manage the scale of the car finance scandal, the FCA has divided the redress scheme into two separate groups based on when the agreement began.

Scheme 1

6 April 2007 to 31 March 2014  Agreements

These are older agreements, where data may be less complete and processing may take slightly longer.

• Implementation period ends 31 August 2026
• If you submitted a complaint before this date, the lender must confirm the outcome within 3 months, by 30 November 2026
• If compensation is offered and accepted, payment is usually made within one month

Typical average redress: around £734 per agreement

Scheme 2

1 April 2014 to 1 November 2024 Agreements

These are more recent agreements, where lenders are expected to process claims more quickly.

• Implementation period ends 30 June 2026
• If you submitted a complaint before this date, the lender must confirm the outcome within 3 months, by 30 September 2026
• If compensation is offered and accepted, payment is usually made within one month

Typical average redress: around £881 per agreement

How much car finance compensation could you receive?

The FCA has introduced a structured method for calculating car finance compensation. This ensures consistency across lenders, including Clydesdale Bank car finance.

Overall average payout

• Around £829 per agreement

This reflects updated FCA estimates, which increased from earlier projections of £695.

Average payouts by type of mis-selling

The amount you receive depends partly on the type of issue affecting your agreement.

Current FCA estimates suggest:

• Discretionary commission cases: around £810
• Contractual tie cases: around £807
• High commission cases: around £1,203

These figures are averages across large groups of customers. Individual outcomes may vary depending on the details of the agreement.

How redress is calculated

The FCA does not use a full refund model. Instead, it applies a hybrid approach. Most customers will not receive a full car finance or PCP refund of all payments. The FCA model is designed to return the difference between what you paid and what you would likely have paid if the agreement had been fair. This is why outcomes vary, even where two agreements appear similar.

Most customers will receive compensation based on:

• The commission paid within the agreement
• The financial disadvantage caused by that commission

This is designed to return the customer to the position they would have been in if the agreement had been fair, rather than providing a windfall.

Interest is added on to the compensation amount at:

• The Bank of England base rate + 1 per cent
• At least 3 per cent per year

In some cases, compensation may be limited (or capped). This is to prevent customers being left in a better financial position than if the agreement had been properly structured in the first place.

What happens after you submit a claim?

After you make a car finance claim the lender will check your agreement under the FCA scheme rules. You do not need to assess your own potential compensation. The lender must determine whether commission was payable, whether disclosure was clear and whether you were financially disadvantaged.

If your agreement is covered by the scheme the lender will issue a formal outcome telling you whether you are due compensation and how it has been calculated.

FCA timelines and payouts in 2026

The timing of your outcome depends on whether you submit a complaint before the implementation deadline.

If you complain before the deadline

Your case will be reviewed as part of the main scheme.

For Scheme 2:

• Outcome confirmed by 30 September 2026
• You have around one month to accept or challenge the offer
• Payment is typically made within one month of acceptance

For Scheme 1:

• Outcome confirmed by 30 November 2026
• Acceptance window runs to the end of December 2026
• Payment is typically made shortly after acceptance

If you do not complain

Lenders are required to identify potentially affected customers and contact them directly.

For Scheme 2:

• Customers may be contacted by 31 December 2026
• Decisions may follow during 2027
• Payments are expected later in 2027

For Scheme 1:

• Contact may be made by early 2027
• Decisions may follow towards the end of 2027
• Payments may extend into 2028

Final deadline

If you are not contacted, you can still submit a car finance claim yourself until 31 August 2027.

Do I need to claim on my car finance right now?

No, it’s not required to make a claim today.

But:

There are benefits in doing so:

• You’ll likely receive a faster resolution
• You are less likely to be ‘lost’ due to outdated contact information
• Your agreement will be proactively reviewed rather than reactively screened

Completing a car finance refund check now can give many consumers a sense of clarity and control over the process.

Do you need help with PCP claims?

You can handle PCP claims yourself at no cost.

You also have access to the Financial Ombudsman Service if you disagree with the outcome of your complaint.

Some people choose to use a service for support with:

• Checking eligibility
• Preparing documentation
• Managing communication with lenders

This is a matter of convenience rather than necessity.

Signs your agreement may be mis-sold

You may wish to explore a car finance claim if your experience included:

• No clear explanation of commission
• An interest rate that seemed higher than expected
• Limited or no comparison of alternative lenders
• Key terms that were not explained clearly
• Pressure to agree to finance quickly

These factors do not guarantee compensation, but they are consistent with the issues identified by the FCA.

Frequently Asked Questions

Can I make a claim if my agreement has ended?

Yes. A car finance claim is based on the terms of the agreement not on whether the agreement is still open or not.

Does it include Clydesdale Bank PCP deals?

Yes. Clydesdale Bank PCP agreements, as well as hire purchase agreements, are included if they meet the FCA requirements.

How do I know if I qualify?

Use our car finance refund check to see if you qualify. Check the start and end dates and think about how the finance was sold to you at the time.

Will everybody get money back?

No. If the FCA criteria is not met then there is no basis for claiming. Only agreements that fit the FCA definition of unfairness will qualify.

Can I appeal the offer made?

Yes. Your case can be referred to the Financial Ombudsman Service who will look at whether the FCA rules have been applied fairly in your case.

When are payouts due?

Payouts 2026 are expected to start from late 2026 for recent deals with older deals following into 2027 and 2028 depending on the scheme.

Can I claim on a Clydesdale finance deal on behalf of a customer who has died?

Yes. Under the FCA car finance scheme rules, the finance regulations apply even if the customer has died. This means that their estate may be eligible to claim compensation from the lender.

If you’re the executor or beneficiary of the will you can make a claim on their behalf. You should use your own personal details but state that you are making a claim on behalf of the deceased person. Include their name and address as well as any information you have about their finance agreement.

The lender may request a will and/or grant of probate to confirm you are able to act on their behalf before any payout is issued.

Final thoughts

The 2026 position is set.

The FCA car finance scheme is a predictable, stable process to manage mis-sold car finance throughout the UK.

If your Clydesdale Partner Finance agreement included inadequate disclosure or opaque pricing you now have a clear process to investigate and potentially receive redress.

The next stage is simple.

Review your agreement.

Know where you stand.

Choose to act now or at a later date.

_________

References:

1. Financial Conduct Authority’s official redress scheme - https://www.fca.org.uk/publication/policy/ps26-3.pdf
2. The FCA’s investigation found that many lenders across the UK relied on commission structures that were not clearly explained to customers - https://www.fca.org.uk/publication/consultation/cp24-15.pdf
3. Total redress payments are expected to reach £7.5 billion- https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme