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Having completed what it called an ‘extensive review’ covering data from 32 million agreements since beginning its investigation on 11 January 2024, the Financial Conduct Authority (FCA) published proposals for a motor finance redress scheme on 7 October 2025, estimating that compensation would be due on an estimated 14.2 million agreements entered into by consumers between 6 April 2007 and 1 November 2024.

Lenders and industry bodies have repeatedly warned that large-scale redress payments for motor finance mis-selling will damage the UK economy.

‘Plevin claims’ are a specific type of complaint about undisclosed, high levels of commission on payment protection insurance (PPI) sold alongside a regulated credit agreement. The term comes from Plevin v Paragon Personal Finance Ltd (Plevin), in which the Supreme Court ruled in November 2014 that non-disclosure of a substantial commission could make a credit relationship ‘unfair’ under the Consumer Credit Act (CCA) 1974.

A Financial Times report published on 18 February 2026, citing 'two people briefed on the Financial Conduct Authority's (FCA) [final redress scheme] plans,' suggests that the regulator will make changes to its redress proposals that will cut up to £1 billion from the compensation bill of carmakers with in-house lenders.

In its motor finance redress proposals, the Financial Conduct Authority (FCA) estimated that consumers will receive an average of £700 per mis-sold agreement.

As the history and scale of car finance mis-selling in the UK have become clear, lenders have continued to advance a position that sounds superficially plausible. Even if a commission or contractual tie was not adequately disclosed, lenders argue that consumers knew the monthly payment and received the car they wanted, and therefore suffered no real detriment.

Banking giant Santander has criticised the Financial Conduct Authority’s (FCA) motor finance redress proposals while announcing a significant addition to its compensation provision.

Motor finance is a high-volume product sold in an environment where decisions are often made quickly. A customer wants to buy a car, the dealer organises the paperwork at the point of sale, and the lender relies on the dealership as an intermediary to generate business at scale.

For many years, millions of motorists took out motor finance agreements in good faith, believing that the person arranging the deal was presenting competitive options and acting in their best interests. In reality, large parts of the market were built on conflicts of interest, weak disclosure, and an information gap so wide that many consumers could not have identified the problem, even if they had suspected one.

Since the Financial Conduct Authority (FCA) published its motor finance redress proposals, both lenders and industry bodies have said that the regulator’s estimates and assumptions are incorrect. Arguments from across these institutions have included claims that the proposed scheme will overcompensate consumers. Others have argued that the FCA is overstating lenders’ redress liabilities or underestimating what lenders will repay.