businessLIVE
Barclays Becomes First Major UK Lender to Offer Car Finance Compensation Payouts
Barclays is the first major UK lender to offer car finance compensation payouts to customers who have complained.
Key points
- Barclays will contact tens of thousands of customers who have already complained, offering an early full and final settlement.
- The FCA announced a £9.1bn compensation scheme in March, but legal challenges forced it to partly suspend the scheme.
- Barclays has set aside £430m in connection with alleged motor finance mis-selling.
Why it matters. Customers who accept early offers cannot later seek more compensation, while those who decline could end up with more, less or no money depending on the legal outcome.
Barclays will this month start offering early full and final settlements to tens of thousands of customers who have complained of car loan mis-selling. The offers must at least match the Financial Conduct Authority's £9.1bn scheme, which the regulator partly suspended after legal challenges, with a hearing due in February next year. Customers have a month to accept, and Barclays has set aside £430m for alleged motor finance mis-selling.
Latest updates
Barclays Becomes First Major UK Lender to Offer Car Finance Compensation Payouts
Barclays will this week begin offering compensation payments to former motor finance customers, making it the first major UK lender to do so. The payments are early settlement offers made before the outcome of legal challenges to the industry-wide redress scheme. The City watchdog launched the £9bn scheme earlier this year, estimating that eligible customers would receive an average of £829 each. Other large motor finance lenders face months of waiting for the outcome of their own challenges. Customers who accept Barclays' offers are likely to receive the money before Christmas.