FCA Investigates Car Finance Misconduct Amid Rising Complaints

Regulator's probe could lead to 'PPI-scale' compensation for drivers overcharged on pre-2021 car finance deals.

Financial Conduct Authority (FCA) is investigating potential misconduct by car dealers and credit brokers who allegedly sold finance at higher interest rates for higher commission, a practice banned in 2021.
More than 10,000 complaints have been made to the Financial Ombudsman Service (FOS) by drivers who believe they were overcharged.
The FOS has ruled in favor of consumers in two cases against Barclays Partner Finance and Black Horse, owned by Lloyds Banking Group.
The FCA has paused the eight-week deadline for motor finance firms to respond to customer complaints and extended the period for consumers to refer their complaints to the FOS to 15 months.
Consumer champion Martin Lewis predicts the regulator will eventually set up a redress scheme to pay all affected customers, potentially leading to 'PPI-type scale' payouts.