Business
Millions of drivers to get £700 compensation from car mis-selling scandal
Compensation payouts on around 14 million unfair motor finance deals could start next year, at an average of about £700 each, the Financial Conduct Authority (FCA) has said.
The regulator previously suggested motorists could receive less than £950 per deal, but it now suggests they could receive less compensation than previously estimated.
The redress scheme was previously estimated to cost lenders between £9bn and £18bn; it is now expected to cost lenders £8.2bn, based on about 85 per cent of eligible consumers taking part.
Motor finance firms broke the law or its rules by not properly informing customers about commission paid by lenders to the car dealers that sold them the loan, the regulator said. This meant that many motorists did not have the opportunity to negotiate or find a better deal and therefore may have paid a higher interest rate for their loan.
Nikhil Rathi, the FCA’s chief executive, said in a statement that it was time for customers to get fair compensation.
“Many motor finance lenders did not comply with the law or the rules,” Mr Rathi said. “Now we have legal clarity, it’s time their customers get fair compensation. Our scheme aims to be simple for people to use and lenders to implement.”
The FCA boss said that not everyone would get what they wanted following the ruling, as the regulator will work on the compensation scheme.
“We recognise that there will be a wide range of views on the scheme, its scope, timeframe and how compensation is calculated,” he said. “On such a complex issue, not everyone will get everything they would like.
“But we want to work together on the best possible scheme and draw a line under this issue quickly.
“That certainty is vital, so a trusted motor finance market can continue to serve millions of families every year.”
The FCA found that car buyers “may have been charged too much” by their lenders, meaning that anyone who bought their car before January 2021 using a car finance scheme could be eligible for compensation.
Some companies used “discretionary commission arrangements” with brokers, which gave them the power to adjust customers’ interest rates on Personal Contract Purchase and Hire Purchase agreements.
The watchdog, which looked into data from across some 32 million agreements made between 2007 and 2024, believes setting up a free compensation scheme will be easier and quicker for customers to access, and more cost-effective for firms by removing much of the legal and administrative work.
As up to 90 per cent of new cars purchased in the UK are bought using motor finance, it’s estimated that millions could potentially be due payouts following the ruling.
Because these brokers earned more commission on higher rates, this created an incentive to maximise the rate given. An estimated 40 per cent of car finance deals were thought to be affected by the issue.
The FCA outlawed this practice from 28 January 2021, but acknowledged that a “high number” of people have now come forward to claim they had been overcharged before the ban.
Millions of victims of car finance mis-selling could receive less compensation than previously estimated, under plans from the regulator.
The Financial Conduct Authority (FCA) said payouts could result from 14 million motor finance agreements between April 2007 and November 2024.
The regulator previously suggested motorists could receive less than £950 per deal, but it now says the average will be about £700. Lenders could pay out £8.2bn in compensation.
The payouts are over commission arrangements between lenders and dealers, unfair contracts, and inaccurate information given to car buyers.
“It’s time their customers get fair compensation,” Nikhil Rathi, chief executive of the FCA, said.
“We recognise that there will be a wide range of views on the scheme, its scope, timeframe and how compensation is calculated. On such a complex issue, not everyone will get everything they would like.”
The scheme would be free to access for consumers.
A ruling at the Supreme Court in August limited the breadth of these cases.
The vast majority of new cars, and many second-hand ones, are bought with finance agreements.
About two million are sold this way each year, with customers paying an initial deposit, then a monthly fee with interest for the vehicle.
In 2021, the FCA banned deals in which the dealer received a commission from the lender, based on the interest rate charged to the customer. These were known as discretionary commission arrangements (DCAs) and meant drivers were at risk of overpaying for the loan.
Other car buyers had an unfair contract because the commission paid to the dealer was so high, and some were not given accurate information about getting the best finance deal.
The regulator has now proposed a scheme to compensate drivers who were subject to these arrangements. If it gets the go-ahead, once the scheme starts:
- lenders will contact those who have already complained. If they don’t hear back after one month, lenders will assume they should look at the case and pay compensation if appropriate
- those who have already complained before the scheme gets up and running are likely to receive compensation faster
- those who have not complained will be contacted by their lender within six months of the scheme starting. People will be asked if they want to opt in to the scheme to have their case reviewed. They will have six months to decide
- those motor finance borrowers who do not receive a letter, for example because lenders no longer have their details and cannot trace them, will have a year from the scheme starting to make a claim
The regulator admitted that consumers can choose not to take part in the FCA’s compensation scheme and instead go to court, where they may get more or less compensation, based on the facts of their case.
Gold and silver prices have been on a record-breaking rise for months, touching all-time highs globally. While most brokers and market analysts predict the rally will continue, Amit Goyal, Co-founder and Chief Global Strategist of PACE 360—which manages over $2.4 billion in assets—has issued a stark warning: the surge may soon end with a major crash.
In Delhi, as of October 6, 24-carat gold costs Rs 1,19,540 per 10 grams, and silver is priced at Rs 1,54,900 per kilogram.
Goyal warns that both precious metals are at their “most dangerous peak in decades.”
He noted, “In the past 40 years, only twice have gold and silver performed this well when the dollar index was weak. In both cases, a massive crash followed.”
According to Goyal, gold and silver are nearing major psychological resistance levels—signals that often mark the end of a bull run.
“I expect both metals to hit these levels in the coming days or weeks, after which a sharp selling wave could begin,” he said.
Goyal predicts a 30–35% drop in gold prices, similar to the corrections seen after major rallies in 2007–08 and 2011, when gold crashed nearly 45%. Silver, he warns, could fall even harder—up to 50% from its peak. That means: Gold could drop to ₹77,701 per 10 grams. Silver could tumble to ₹77,450 per kilogram.
Goyal suggests investors wait for gold to fall to $2,600–$2,700 per ounce before re-entering the market. “At that level, gold will again become one of the best global investments,” he said. However, he advised caution with silver, citing weaker long-term prospects.
Goyal explained that silver’s industrial demand—used in photovoltaics, semiconductors, and electric vehicles—won’t be enough to offset the impact of a global slowdown.
He added, “Silver is currently overhyped and overbought, making it more vulnerable to steep declines.”
Experts caution that short-term traders may face volatility, while long-term investors should wait for corrections before making new entries. Diversifying portfolios beyond gold and silver is recommended to manage risk.
Disclaimer: The views expressed are those of market experts and do not reflect News18’s position. Investors are advised to consult certified financial advisors before making any investment decision
Last Updated:
The nine per cent projection for 2026 marks a slight increase from the actual 8.9 per cent salary growth observed in 2025, even as global economic growth slows, as per survey
The 30th edition of AON’s ‘Annual Salary Increase and Turnover Survey 2024-25 India is based on inputs from 1,060 organisations across 45 industries. (AI generated image)
Salaries in India are likely to rise by 9 per cent next year, on the back of resilient consumption, investment and policy support despite global economic growth uncertainties, a survey said on Tuesday.
The nine per cent projection for 2026 marks a slight increase from the actual 8.9 per cent salary growth observed in 2025, even as global economic growth slows, according to global professional services firm AON’s ‘Annual Salary Increase and Turnover Survey 2025-26 India.
Despite headwinds, India’s economy remained resilient, supported by strong domestic consumption, investments and policy measures, it noted.
The 30th edition of AON’s ‘Annual Salary Increase and Turnover Survey 2024-25 India is based on inputs from 1,060 organisations across 45 industries.
Further, its survey stated that salary increases are projected to vary across industries, with real estate/infrastructure (10.9 per cent) and non-banking financial companies (10 per cent) seeing the highest increases in 2026.
The automotive or vehicle manufacturing is expected to witness 9.6 per cent salary growth, followed by engineering design services (9.7 per cent), retail (9.6 per cent) and life sciences (9.6 per cent), reflecting continued investment in critical talent pools.
“India’s growth story remains strong, supported by infrastructure investments and policy measures. Our survey shows that key sectors like real estate and NBFCs are leading the way in talent investment and businesses are taking a strategic approach to compensation to ensure sustainable growth and workforce stability, even amid global uncertainty,” said Roopank Chaudhary, partner and rewards consulting leader, Talent Solutions for India at Aon.
Further, the survey revealed that overall attrition rates have declined to 17.1 per cent in 2025, down from 17.7 per cent in 2024 and 18.7 per cent in 2023.
This gradual decline points to a more stable talent landscape, with organisations experiencing improved employee retention, it stated.
As the workforce becomes more settled, companies are well-positioned to invest in targeted upskilling and development programmes, ensuring they can build a resilient talent pipeline and prepare for future business needs, according to the survey.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)
October 07, 2025, 20:43 IST
Read More
Scientists develop end-to-end encryption for git services
SoFi Stadium hawk stolen during Rams game located, second hawk remains missing
Kate Gosselin’s demands for television return laid bare
-
Tech1 week agoInterrupting encoder training in diffusion models enables more efficient generative AI
-
Sports1 week agoTransfer rumors, news: Benzema linked with reunion with Mourinho at Benfica
-
Tech1 week agoMore people are using AI in court, not a lawyer. It could cost you money—and your case
-
Fashion1 week agoThe World’s Fashion Business News
-
Tech1 week agoOpenAI Is Preparing to Launch a Social App for AI-Generated Videos
-
Fashion1 week agoPay, human rights and the environment: the OECD puts Shein on notice
-
Business1 week agoTop stocks to buy today: Stock market recommendations for September 30, 2025 – check list – The Times of India
-
Business1 week agoYouTube to pay $24.5m to settle Trump lawsuit over Capitol riot