A leading finance claims expert has once again brought national attention to one of the UK’s largest financial scandals in recent years: the car finance mis-selling scandal. In a recent segment on Good Morning Britain, the expert analysed the Financial Conduct Authority’s (FCA) latest proposal to compensate millions of motorists who may have been hit by hidden commissions on car finance [1]. They gave viewers expert context on the issue as well as clear next steps should they feel they have been affected.

The dialogue followed the FCA publishing a consultation for a mass redress scheme [2] which could see drivers who unwittingly paid higher interest rates due to undisclosed commissions being offered a payout. According to the finance expert, this could affect as many as 14 million car finance agreements out of roughly 32 million issued since 2007 [3], marking one of the largest consumer compensation efforts in UK financial history.

The Car Finance Mis-Selling Scandal

The specialist discussed the FCA’s statutory consultation into the process used to pay back mis-sold car finance customers, which is seeking to make it easier for affected drivers to be refunded. The financial watchdog has predicted that compensation will be handed out to millions of mis-sold car finance customers next year, in what could be a watershed moment for the car finance scandal.

The potential scale is staggering. With millions of drivers having financed their vehicles through PCP or HP agreements, the FCA estimates an average compensation of £700 per agreement [4]. The regulator plans to roll out the redress scheme in early 2026, likely between February and April, covering vehicles such as cars, motorbikes, and campervans bought on finance between April 2007 and November 2024.

The finance expert explained that while the figure of £700 is an average, payouts would vary depending on the size and length of each agreement. Those with multiple loans could be entitled to compensation per agreement. The scheme, they added, is designed to proactively identify affected individuals, though there are risks for older cases where records may have been lost or people have changed names or addresses.

For readers wanting to understand the full background and timeline, the latest updates on car finance claims in the UK provide ongoing developments from both regulators and consumer rights advocates.

Three Ways You May Have Been Mis-Sold

The industry expert broke down the three most common ways people may have been mis-sold under this scheme, many of which the average car buyer would not have known at the time. The central issue is a lack of adequate disclosure by dealers and brokers.

1. Discretionary Commission Arrangements (DCAs) - Dealers or brokers had the power to raise your interest rate in order to increase their commission, without telling you. This is at the heart of most car finance mis-selling claims.
2. Contractual Ties - Dealers sometimes failed to disclose that they only worked with one lender or gave preference to a single provider, even if they implied they were comparing offers.
3. Unfairly High Commissions - In many cases, commissions accounted for over 10% of the loan or as much as 35% of the total credit cost, again without the borrower being informed.

The analyst said that these deals were both unfair disclosures and caused massive financial harm. Borrowers ended up paying hundreds, even thousands more than necessary and never knew their dealer's profit margin was based on secrecy.

What Consumers Should Do Now

In the latter half of the segment, the finance expert turned from explanation to action. The overriding message is simple: don’t leave it until the FCA scheme is officially launched. Although the redress system will automatically target everyone, the message is to get in there first. By submitting your complaint now, it means you’ll be in the system already if further problems occur.

They warned that older cases may be harder to trace, especially if lenders have merged, gone into administration, or lost records. Likewise, people who have changed names or moved home might not be located easily once the compensation process starts.

The expert explained two key types of redress systems under the FCA’s proposal:

• Opt-out payments for those whose complaints relate to the DCA model, meaning you’ll automatically receive a letter and payment unless you choose to decline.
• Opt-in payments for those affected by other mis-selling methods, which will require individuals to confirm their claim.

Crucially, compensation is per agreement, not per person. This means that if you’ve had multiple PCP or HP loans over the years, you could receive compensation for each.

If you believe you might qualify, consumer experts recommend researching reputable firms or finance claims expertss like Reclaim247 that provide step-by-step guidance on how to begin your complaint correctly.

The Role of Claims Management Companies

The industry expert also sounded a note of caution for those thinking of enlisting the help of a claims management company. They said some charge fees of up to 30% and this is often before any real work has been carried out. In this case, make sure to opt for the best car finance claim company that operates on a no win no fee basis, meaning, they will only get paid if their client is compensated accordingly.

For most consumers, the expert said, direct complaints are free and can be filed with the lender or through the Financial Ombudsman Service if necessary. For anyone still unsure about how to proceed, the car finance scandal page offers a detailed overview of what went wrong, who’s responsible, and how the FCA’s new compensation structure will affect future lending practices.

Looking Ahead: What Consumers Can Expect

The FCA’s proposal to address car finance refund cases represents one of the most significant regulatory interventions since the PPI scandal. The FCA expects to pay compensation to millions of mis-sold car finance customers next year, marking a major shift in accountability within the auto-lending sector.

Industry sources think that by the time the scheme is up and running in early 2026, lenders and brokers will need to put aside billions to pay refunds. The regulator’s action has already prompted many consumers to look at old agreements and see if they were misled.

If you've already submitted a claim with a firm such as Reclaim247 and are asking how long does Reclaim247 take, timescales can depend on individual lenders' response rates and on whether a claim is for discretionary commissions or other matters. But experts in the industry are predicting that those who file early may benefit from quicker results once the scheme officially gets underway.

For those still deciding, experts in PCP claims stress that even if you are unsure whether your agreement qualifies, submitting a preliminary complaint could protect your position before the FCA’s cut-off period.

Final Thoughts

The Good Morning Britain conversation highlighted just how extensive the car finance scandal is and the importance of not delaying claiming so that you are in a position to be compensated, rather than being out of time. The FCA’s new scheme is expected to be simple and fair when it launches, but the finance expert said that this wasn’t the main message people should take from the discussion.

If you believe you may have been impacted by fixed commission agreements or other non-disclosure issues, it may be to your benefit to obtain early advice and lodge your claim prior to the commencement of the mass redress scheme, in order for your matter to be one of the first assessed.

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References:

1. In a recent segment on Good Morning Britain, the expert analysed the Financial Conduct Authority’s (FCA) latest proposals to compensate millions of motorists who may have been hit by hidden commissions on car finance - https://www.youtube.com/watch?v=SDNVWZ3jBJI
2. the FCA publishing a consultation for a mass redress scheme - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
3. this could affect as many as 14 million car finance agreements out of roughly 32 million issued since 2007 - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme
4. average compensation of £700 per agreement - https://www.fca.org.uk/publication/consultation/cp25-27.pdf