{"id":120931,"date":"2026-05-27T08:00:00","date_gmt":"2026-05-27T07:00:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=120931"},"modified":"2026-05-27T00:55:01","modified_gmt":"2026-05-26T23:55:01","slug":"830-compensation-plan-sparks-concern","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/830-compensation-plan-sparks-concern\/","title":{"rendered":"\u00a3830 Compensation Plan Sparks Concern as Some Drivers Could Get Nothing"},"content":{"rendered":"\n

Millions of motorists could receive compensation under the UK\u2019s planned car finance redress scheme, with average payments estimated at \u00a3830<\/strong> per eligible agreement. Yet analysis suggests a large group of lower-income drivers may not qualify under the current rules.<\/p>\n\n\n\n

The proposed compensation programme, led by the Financial Conduct Authority (FCA<\/strong>), remains subject to legal challenges from both consumer groups and lenders. While the regulator continues to defend the scheme, payouts remain uncertain.<\/p>\n\n\n\n

The FCA\u2019s redress plan was created to compensate consumers who may have been mis-sold motor finance agreements involving commission arrangements that were not properly disclosed. According to the regulator, around 12 million agreements could fall within the scope of compensation. At the same time, criticism has emerged over eligibility thresholds that exclude some lower-value agreements, raising questions about who ultimately benefits from the scheme.<\/p>\n\n\n\n

Lower-Value Car Finance Agreements May Fall outside Compensation Plans<\/strong><\/h2>\n\n\n\n

According to analysis by consumer law firm Slater and Gordon,<\/strong> approximately 1.1 million lower-value motor finance agreements would not qualify for compensation under the FCA\u2019s proposed rules.<\/p>\n\n\n\n

The exclusion applies where commission levels were \u00a3120 or less for agreements entered into before 1 April 2014<\/strong>, and \u00a3150 or less for agreements after that date. Under the regulator\u2019s framework, commission below those thresholds is considered unlikely to have influenced either consumer decisions or broker conduct.<\/p>\n\n\n\n

Slater and Gordon said its assessment, based on client data and case experience, indicated that these lower-value agreements were commonly used to finance cheaper cars or vans, often involving borrowing of only a few thousand pounds.<\/p>\n\n\n\n

Elizabeth Comley<\/a>, chief operating officer at Slater and Gordon, argued that the thresholds disproportionately affect financially stretched households. She said the people excluded from compensation <\/strong>were often those purchasing lower-cost vehicles through smaller loans and who were less able to absorb financial losses.<\/p>\n\n\n\n

Comley added that consumers taking out finance agreements worth around \u00a32,000 were generally not high-income borrowers and were instead people trying to afford access to a vehicle.<\/p>\n\n\n\n

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Millions of car finance customers will get payouts this year as we go ahead with our compensation scheme.

We\u2019ve listened to feedback to make sure the scheme is fair for consumers and proportionate for firms.https:\/\/t.co\/5bDbURjVFd<\/a>#CarFinance<\/a> #MotorFinance<\/a> pic.twitter.com\/uIpPPxuysu<\/a><\/p>— Financial Conduct Authority (@TheFCA) March 30, 2026<\/a><\/blockquote>