Overview

• The proposed scheme targets loans where lenders paid brokers commission, including discretionary commission arrangements banned in 2021 for encouraging higher interest rates.
• Eligible agreements span April 6, 2007 to November 1, 2024, with average payouts estimated at about £700 per affected borrower and total redress around £8.2 billion.
• Once live, lenders will review existing complaints first, invite other customers to opt in within six months, and allow a one‑year window for those not directly contacted, supported by an FCA awareness campaign.
• The FCA urges motorists to claim directly because using claims‑management or law firms can significantly reduce compensation through fees, and it is acting on transparency around exit charges.
• Banks and finance firms have set aside just over £2 billion so far, industry groups question the FCA’s loss estimates, and the regulator’s plan follows an August Supreme Court ruling that narrowed private claims but left scope for a broad scheme.