"Around 12.1 million agreements could qualify for payouts worth an average of £829 each, according to the Financial Conduct Authority, which expects total compensation to reach £7.5bn."
"At the heart of the scandal are so-called discretionary commission arrangements (DCAs), widely used before their ban in 2021, which allowed brokers to increase the interest rates charged on loans."
"Motorists who were not properly informed about high commission structures or contractual ties between lenders and brokers are among those eligible for compensation."
"Santander said its decision had been 'finely balanced', citing a desire to provide certainty for customers, shareholders and the wider motor finance market."
The Financial Conduct Authority has initiated a compensation scheme for mis-sold car finance deals, potentially affecting 12.1 million agreements. Average payouts are estimated at £829, totaling around £7.5bn. The scheme aims to resolve claims by the end of 2027, with early payments expected this year. Discretionary commission arrangements, which allowed brokers to inflate interest rates, are central to the issue. Customers unaware of high commission structures are eligible for compensation, covering agreements from April 2007 to November 2024. Santander has agreed to comply with the compensation plans.
Read at London Business News | Londonlovesbusiness.com
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