Bank agrees to pay compensation to thousands of drivers after mis-selling loans – The Sun
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A MAJOR high street bank has agreed to pay compensation after mis-selling car finance loans.
Santander has agreed to a redress scheme that will give motorists payouts of around £829 each.
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Compensation is due on around 12.1million mis-sold deals from multiple firms, the financial watchdog said in March as it unveiled plans for its redress scheme.
The Financial Conduct Authority (FCA) expects the total amount of redress paid under its scheme to be about £7.5billion, based on about 75% of eligible consumers making a claim.
It thinks millions of claims will be paid out this year and the vast majority settled by the end of 2027.
A spokesperson for Santander said on Saturday: “We have decided not to challenge the schemes and will now focus on their implementation.”
Read more on car finance
MOTOR CLAIM
Millions waiting for £800 car finance payouts face DELAYS due to legal battle
NOT BANKING ON IT
Bank to quit UK over 'unfair' car finance bill as millions to get £829
Lenders can start making payments immediately and people who have already complained are likely to get paid first, the FCA said at the end of last month.
Most of the car finance deals covered involve so-called discretionary commission arrangements (DCAs), which were banned in 2021.
This refers to arrangements whereby brokers, including car dealers, were able to increase interest rates on car loans so they could get more commission.
The FCA said this led to unfairness for customers who were not properly informed about the arrangement and therefore did not have the opportunity to negotiate or find a better deal.
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People who were not told about a deal involving high commission or a contractual tie to a firm are also eligible for compensation.
The programme covers agreements taken out between April 6, 2007 and November 1, 2024.
Speaking on its decision Santander added: “This was a finely balanced judgment reflecting our primary desire to bring greater certainty to our customers, shareholders and the wider motor finance sector, factors which outweighed our disagreement with elements of the proposed schemes.
“We will continue to work constructively with regulators and policymakers to seek to improve the competitiveness of the UK in the interests of all our customers, taxpayers and investors.”
The FCA made changes to the long-awaited redress scheme’s format after receiving more than 1,000 responses to a consultation, including from motor finance lenders, consumer groups, car makers and industry bodies.
The initial proposals drew criticism from both sides, with lenders and car finance providers raising concerns that the level of redress was too high and did not accurately reflect what customers lost.
Meanwhile, consumer groups and some MPs argued that motorists would be shortchanged under the plans.
The feedback has resulted in it tightening the eligibility criteria so only those who were treated unfairly will get compensation, according to the FCA.
It expects around a third of cases to be capped to ensure consumers will not be paid too much.
Who is eligible for the cash?
You are likely eligible if you took out a motor finance loan between April 6, 2007, and November 1, 2024, and weren’t told about certain commission deals.
This includes “discretionary commission arrangements” where dealers hiked interest rates to get a bigger kickback, or high commission deals where the payout was at least 39% of the credit cost.
Loans with 0% APR or very low interest are generally excluded.
How much can I get?
The FCA says the average payout is around £829 per agreement.
For most, this is calculated by looking at the commission paid and the “estimated loss” from the inflated interest rate.
Those with older loans (pre-2014) may get slightly more as losses were higher then.
In about 1 in 3 cases, payouts will be capped to make sure you aren’t “put back in a better position” than if you’d been treated fairly in the first place.
Do I need to make a claim?
If you haven’t complained yet, you don’t necessarily need to rush.
Lenders must contact you if they think you are “likely to be owed money.”
However, those who have already complained or do so before the implementation deadlines in mid-2026 will be compensated sooner.
If you aren’t contacted, you have until August 31, 2027, to put in a claim.
When will I be paid?
Millions are expected to get their money this year.
Lenders have a deadline of June 30, 2026, to prepare for newer loans, and August 31, 2026, for older ones.
Once those dates pass, firms have three months to tell you if you’re getting a payout.
Most remaining claims should be settled by the end of 2027.
Should I use a claims firm?
The FCA says there is “no need” to use a claims management company or a law firm.
The scheme is designed to be free and easy to use.
If you use a firm, they could take a massive chunk of your cash – potentially over 30% of your total payout.
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©News Group Newspapers Limited in England No. 679215 Registered office: 1 London Bridge Street, London, SE1 9GF. “The Sun”, “Sun”, “Sun Online” are registered trademarks or trade names of News Group Newspapers Limited. This service is provided on News Group Newspapers’ Limited’s Standard Terms and Conditions in accordance with our Privacy & Cookie Policy. To inquire about a licence to reproduce material, visit our Syndication site. View our online Press Pack. For other inquiries, Contact Us. To see all content on The Sun, please use the Site Map. The Sun website is regulated by the Independent Press Standards Organisation (IPSO)
Our journalists strive for accuracy but on occasion we make mistakes. For further details of our complaints policy and to make a complaint please click this link: thesun.co.uk/editorial-complaints/
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This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
A MAJOR high street bank has agreed to pay compensation after mis-selling car finance loans.
Santander has agreed to a redress scheme that will give motorists payouts of around £829 each.
Please provide a valid email.
Your info will be used in accordance with our Privacy Policy
You'll now receive top stories, breaking news, and more, straight to your email.
Compensation is due on around 12.1million mis-sold deals from multiple firms, the financial watchdog said in March as it unveiled plans for its redress scheme.
The Financial Conduct Authority (FCA) expects the total amount of redress paid under its scheme to be about £7.5billion, based on about 75% of eligible consumers making a claim.
It thinks millions of claims will be paid out this year and the vast majority settled by the end of 2027.
A spokesperson for Santander said on Saturday: “We have decided not to challenge the schemes and will now focus on their implementation.”
Read more on car finance
MOTOR CLAIM
Millions waiting for £800 car finance payouts face DELAYS due to legal battle
NOT BANKING ON IT
Bank to quit UK over 'unfair' car finance bill as millions to get £829
Lenders can start making payments immediately and people who have already complained are likely to get paid first, the FCA said at the end of last month.
Most of the car finance deals covered involve so-called discretionary commission arrangements (DCAs), which were banned in 2021.
This refers to arrangements whereby brokers, including car dealers, were able to increase interest rates on car loans so they could get more commission.
The FCA said this led to unfairness for customers who were not properly informed about the arrangement and therefore did not have the opportunity to negotiate or find a better deal.
British Airways makes major change to loyalty scheme after error
Government steps up plans for possible food shortages due to Iran War
10 summer jobs paying up to £8k open NOW – you can even watch the World Cup
Tesco shuts down Clubcard feature today – what to do if you missed the deadline
People who were not told about a deal involving high commission or a contractual tie to a firm are also eligible for compensation.
The programme covers agreements taken out between April 6, 2007 and November 1, 2024.
Speaking on its decision Santander added: “This was a finely balanced judgment reflecting our primary desire to bring greater certainty to our customers, shareholders and the wider motor finance sector, factors which outweighed our disagreement with elements of the proposed schemes.
“We will continue to work constructively with regulators and policymakers to seek to improve the competitiveness of the UK in the interests of all our customers, taxpayers and investors.”
The FCA made changes to the long-awaited redress scheme’s format after receiving more than 1,000 responses to a consultation, including from motor finance lenders, consumer groups, car makers and industry bodies.
The initial proposals drew criticism from both sides, with lenders and car finance providers raising concerns that the level of redress was too high and did not accurately reflect what customers lost.
Meanwhile, consumer groups and some MPs argued that motorists would be shortchanged under the plans.
The feedback has resulted in it tightening the eligibility criteria so only those who were treated unfairly will get compensation, according to the FCA.
It expects around a third of cases to be capped to ensure consumers will not be paid too much.
Who is eligible for the cash?
You are likely eligible if you took out a motor finance loan between April 6, 2007, and November 1, 2024, and weren’t told about certain commission deals.
This includes “discretionary commission arrangements” where dealers hiked interest rates to get a bigger kickback, or high commission deals where the payout was at least 39% of the credit cost.
Loans with 0% APR or very low interest are generally excluded.
How much can I get?
The FCA says the average payout is around £829 per agreement.
For most, this is calculated by looking at the commission paid and the “estimated loss” from the inflated interest rate.
Those with older loans (pre-2014) may get slightly more as losses were higher then.
In about 1 in 3 cases, payouts will be capped to make sure you aren’t “put back in a better position” than if you’d been treated fairly in the first place.
Do I need to make a claim?
If you haven’t complained yet, you don’t necessarily need to rush.
Lenders must contact you if they think you are “likely to be owed money.”
However, those who have already complained or do so before the implementation deadlines in mid-2026 will be compensated sooner.
If you aren’t contacted, you have until August 31, 2027, to put in a claim.
When will I be paid?
Millions are expected to get their money this year.
Lenders have a deadline of June 30, 2026, to prepare for newer loans, and August 31, 2026, for older ones.
Once those dates pass, firms have three months to tell you if you’re getting a payout.
Most remaining claims should be settled by the end of 2027.
Should I use a claims firm?
The FCA says there is “no need” to use a claims management company or a law firm.
The scheme is designed to be free and easy to use.
If you use a firm, they could take a massive chunk of your cash – potentially over 30% of your total payout.
British Airways makes major change to loyalty scheme after error
Government steps up plans for possible food shortages due to Iran War
10 summer jobs paying up to £8k open NOW – you can even watch the World Cup
Tesco shuts down Clubcard feature today – what to do if you missed the deadline
©News Group Newspapers Limited in England No. 679215 Registered office: 1 London Bridge Street, London, SE1 9GF. “The Sun”, “Sun”, “Sun Online” are registered trademarks or trade names of News Group Newspapers Limited. This service is provided on News Group Newspapers’ Limited’s Standard Terms and Conditions in accordance with our Privacy & Cookie Policy. To inquire about a licence to reproduce material, visit our Syndication site. View our online Press Pack. For other inquiries, Contact Us. To see all content on The Sun, please use the Site Map. The Sun website is regulated by the Independent Press Standards Organisation (IPSO)
Our journalists strive for accuracy but on occasion we make mistakes. For further details of our complaints policy and to make a complaint please click this link: thesun.co.uk/editorial-complaints/
source
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
