Updated: 29 April 2026
Originally Published: 11 March 2025
Understanding the Close Brothers situation in 2026
If you are looking into a Close Brothers car finance claim, you are not just looking at a typical complaint.
You are looking at a lender that has been directly involved in the legal and regulatory turning point of the entire car finance scandal.
Close Brothers is not just part of the wider issue. It has been at the centre of key court cases, regulatory scrutiny, and financial provisioning decisions that helped shape how compensation now works.
That is why the question is slightly different here.
It is not just: Can I make a car finance claim?
It is: What is the Close Brothers scandal, and what does it mean for my agreement today?
What is the Close Brothers scandal?
The Close Brothers scandal refers to how certain car finance agreements were structured and sold, particularly where commission influenced the cost of borrowing without being clearly explained.
Like other lenders, Close Brothers worked through dealerships. Dealers introduced finance options and helped complete agreements. At the same time, they could receive commission from lenders.
The issue is what happened behind that process.
In many cases:
- the interest rate was not fixed
- dealers could influence pricing within a range
- higher rates could increase commission
- this was not always clearly disclosed
That is the foundation of many mis-sold car finance claims today.
Regulators later concluded that some firms failed to properly disclose commission arrangements, which could leave customers paying more than they realised.
Close Brothers and the Supreme Court cases
Close Brothers is one of the lenders directly involved in major legal cases that helped shape the current claims landscape.
One of the most significant is:
This case reached the UK Supreme Court and examined whether lenders could be held responsible where dealers received commission without proper disclosure.
The key question was:
- if the dealer and customer relationship could impose obligations
- non-disclosure could make the contract unpalatable
- customers could have a claim against lenders even if arranged by the dealer
The result did not close the door on claims.
Instead, it clarified the legal boundaries and shifted focus toward unfair relationship claims under consumer credit law, rather than broader arguments like bribery.
That shift is important.
It is one of the reasons the FCA stepped in with a formal redress scheme, rather than leaving claims to be decided purely through the courts.
Why Close Brothers is a key name in the car finance scandal
Close Brothers has been most commonly associated with the scandal for two reasons. Firstly, the business model was predominantly dealership-led distribution of finance which is where the vast majority of the commission issues lay. Secondly, it has had to publicly acknowledge the scale of potential redress.
As of 2026:
- Close Brothers has set aside roughly £294 million to £320 million to cover potential compensation costs [2]
- earlier estimates and external analysis suggested exposure could be significantly higher in some scenarios
The company has stated it can absorb these costs, but the scale of provisioning highlights the size of the issue.
This is not a small number of isolated claims.
It reflects a systemic review of agreements across the market.
What the FCA scheme means for Close Brothers claims
In March 2026, the FCA confirmed a redress scheme for claims about car finance [3]:
The way individual complaints and court cases have run to now will change. This will set in place:
- a standardised approach to assessing agreements
- a single set of rules for calculating redress
- a defined timetable for decisions and payment
The scheme's overall numbers:
- around 12.1 million agreements are in scope
- total value of redress across the market is estimated at around £7.5 billion
- average value of redress per agreement is about £829 [4]
These numbers are across all lenders in scope, including Close Brothers.
This gives an indication of the numbers, not an individual certainty.
How Close Brothers compensation is calculated
A Close Brothers compensation claim is based on financial impact.
It looks at:
- what you paid
- what a fair agreement may have looked like
- the difference between the two
This is why outcomes vary.
Two customers with similar cars may receive very different results depending on:
- interest rates
- commission levels
- agreement length
- pricing structure
Types of car finance mis-selling linked to Close Brothers
The FCA now recognises three main types of issues.
These are not theoretical. They directly influence car finance compensation.
Discretionary commission arrangements
This is the most common issue.
Dealers could adjust interest rates within a range. Higher rates could increase their commission.
Average compensation: around £810
Contractual tie or restricted lender access
Some agreements effectively limited choice by prioritising certain lenders.
Customers may not have realised alternatives existed.
Average compensation: around £807
High commission cases
These involve unusually high commission levels relative to the loan.
They are less common but often result in higher payouts.
Average compensation: around £1,200+
Why PCP claims are central to Close Brothers cases
Many PCP claims involve Close Brothers agreements.
PCP deals are more complex than they appear.
They include:
- monthly payments
- a final balloon payment
- assumptions about vehicle value
Because of this structure, small differences in interest rate can have a larger long-term effect.
That is why PCP refund claims are so common.
Payouts 2026 and what to expect
There is no fixed payout date.
However:
- the FCA car finance scheme is now active
- claims are expected to be processed during 2026 and 2027
- payouts 2026 are expected as reviews begin
Timing depends on:
- which scheme your agreement falls into
- how complex the case is
- how many claims are being processed
More recent agreements are generally expected to move faster.
FCA scheme timelines, deadlines and what they mean
The FCA redress scheme applies to agreements taken out between 2007 and 2024.
These are split into two periods.
Scheme 1
- Covers agreements from 6 April 2007 to 31 March 2014
- Older agreements may take longer to review due to record availability
- Average compensation is lower on average due to shorter or older agreements
Scheme 2
- Covers agreements from 1 April 2014 to 1 November 2024
- More recent agreements are generally easier to process
- Average compensation is typically higher
Key deadline
- The current deadline to submit a claim is 31 August 2027
This is important.
Even though payouts 2026 are expected as the scheme progresses, the process will continue over time. Claims are not handled all at once, and later submissions may take longer to reach a decision.
How to start a Close Brothers claim back
If you want to explore a Close Brothers claim back, the process is straightforward, but it helps to understand your options.
Step 1. Complete a car finance refund check
Most people begin with a car finance refund check to know their eligibility for car finance claims.
This can be done:
- directly through a claims management company
- through a specialist platform
- or with the support of a finance claims expert
This step helps confirm whether your agreement may fall within the FCA scheme before you proceed further.
Step 2. Gather basic details
You do not need full paperwork.
You can start with:
- your name and address history
- approximate agreement dates
- vehicle details
If you are unsure, you can still proceed and locate records later.
Step 3. Decide how you want to make your claim
You have two main options.
Claim directly
You can submit your claim yourself to Close Brothers.
This gives you full control, but requires you to manage communication and follow-up.
Use a finance claims expert or CMC
Some people choose to use a finance claims expert or claims management company.
They can help with:
- identifying agreements
- completing the car finance refund check
- preparing and submitting the claim
- managing communication with the lender
- guiding next steps if needed
What to consider
- they usually charge a fee if your claim is successful
- they do not affect whether you are eligible
- they can reduce time and uncertainty
For straightforward cases, many people proceed independently. For more complex situations, support can be useful.
When to consider using a finance claims expert
You do not need professional help to make a claim.
However, it may be useful if:
- you cannot find your car finance agreements or you are wondering "how to find old car finance agreements"
- you have had multiple finance agreements over time
- you are unsure how your agreement was structured
- you want help understanding a compensation offer
A finance claims expert does not increase your compensation. They help you navigate the process and ensure nothing is missed.
How to find old Close Brothers agreements
If you need to find my car finance agreements, there are several ways to do it.
Start with:
- bank statements showing monthly payments
- email records or finance confirmations
- dealership paperwork
- credit reports from Experian, Equifax, or TransUnion
You can also contact Close Brothers directly.
If records are incomplete, a car finance refund check through a CMC or finance claims expert can often help identify your agreement using limited information.
What this means for taking action
The process is now structured, but it is not automatic.
Even though the FCA scheme is in place, you still need to take a step to have your agreement reviewed.
That step is usually:
- running a car finance refund check
- confirming eligibility
- then deciding whether to submit a claim
You can do this yourself, or with the support of a finance claims expert or claims management company.
Frequently Asked Questions
What is the Close Brothers scandal in simple terms?
Some car finance agreements had commission structures which were not transparent and may have increased the cost to the customer.
Can I make a Close Brothers car finance claim if my agreement has ended?
Yes. Claims are assessed on the structure of the agreement when it was set up, rather than its current status.
How much compensation might I be entitled to?
The average compensation paid is approximately £829, but will vary depending on the agreement and the nature of the mis-selling.
Will all PCP claims qualify?
No. All PCP claims will be considered on their individual merits. Some will not meet the FCA criteria.
When will Close Brothers make a payment?
There is no set date. Payouts 2026 are anticipated as and when claims are processed, however, the timing will vary.
Do I need to know if commission was paid?
No. This will be considered by the lender as part of the review.
What this means for you
Close Brothers is not just another lender in this space.
It has been directly involved in:
- major legal cases
- regulatory scrutiny
- financial provisioning for compensation
That makes it one of the clearest examples of how the car finance scandal has moved from theory to structured resolution.
But the outcome is still individual.
The FCA scheme does not assume your agreement was unfair.
It gives you a way to find out.
The next step is simple.
Run a car finance refund check.
Understand your agreement.
Then decide what to do next.
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References:
- Hopcraft v Close Brothers - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
- Close Brothers has set aside roughly £294 million to £320 million to cover potential compensation costs - https://www.theguardian.com/business/2026/apr/08/close-brothers-shares-surge-uk-bank-comfortably-absorb-car-finance-compensation
- In March 2026, the FCA confirmed a redress scheme for claims about car finance - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
- average value of redress per agreement is about £829 - https://www.fca.org.uk/publication/policy/ps26-3.pdf