We need swift compensation for those mis-sold car finance

15 Aug 2025
Victoria Collins

15 August 2025

Victoria Collins, Liberal Democrat MP for Harpenden and Berkhamsted, has urged the government and Financial Conduct Authority (FCA) to work together to swiftly deliver a compensation scheme that will see lenders who mis-sold car finance deals “make up for their actions”

This comes after the financial watchdog last week (on 3 August) announced a consultation on a possible compensation scheme.

The news follows a landmark Supreme Court ruling opening the possibility of compensation for particularly large car finance commissions, which judges said were unfair.

Car buyers may also be entitled to payouts if their dealer had secretly hiked the interest rate on their car loan through what is known as a “discretionary commission arrangement” (DCA).

Last week, the financial watchdog the Financial Conduct Authority said it will launch a consultation in early October to determine what a potential compensation scheme might look like. It said that “If the compensation scheme goes ahead, the first payments should be made in 2026.”

The UK’s largest car finance lender, Lloyds Bank, had previously set aside £1.2bn to cover compensation claims.

Victoria Collins, Liberal Democrat MP for Harpenden and Berkhamsted, said:

“It’s absolutely vital that any consumer who was unfairly ripped off through eye-watering, unfair commission on car finance deals gets the compensation they are owed.

“Following the pivotal Supreme Court ruling last week, we Liberal Democrats are urging the government and financial watchdog to work together to make this happen, and secure access to compensation without delay.

“We need to put an end to lenders getting away with this, and Liberal Democrats will keep holding the government to account on doing so.”

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