Tens of thousands of affected borrowers will be offered early settlements calculated using the Financial Conduct Authority's model. Those who accept will likely receive compensation before Christmas but must forfeit any future claims regarding their vehicle loan commissions. The early resolution bypasses delays from ongoing legal challenges that have paused the regulator's broader compensation program until at least February. Meanwhile, Barclays has established a £430m provision to cover its potential liabilities tied to the scandal.
Key points
Customers who accept an early settlement will not be asked to repay funds if future legal…: Customers who accept an early settlement will not be asked to repay funds if future legal rulings lower compensation amounts.
Borrowers who receive an offer have exactly one month to decide on the full and final set…: Borrowers who receive an offer have exactly one month to decide on the full and final settlement.
Those who reject the bank's proposal could face waiting until 2027 or 2028 if the regulat…: Those who reject the bank's proposal could face waiting until 2027 or 2028 if the regulator's scheme survives ongoing litigation.
Sources checked by our analysis pipeline: 1
Barclays will this month start offering compensation to tens of thousands of people who claim they were mis-sold car loans, with some of those who accept likely to see the money land in their account before Christmas.
Amid an ongoing legal battle over an industry-wide compensation scheme for victims of the UK’s car finance scandal, Barclays has become the first big UK lender to break cover and begin offering payouts to some customers who have complained.
Under the rules, “early settlement” offers of this kind must at least match what people would receive under the multibillion-pound scheme that is being challenged – which may help to address fears that banks might try to make “lowball” offers.
But consumers face a tricky decision as, depending on the outcome of the legal battle, they could end up with more money, less money or nothing at all if they decide to decline the offer and wait.
In March this year, the Financial Conduct Authority (FCA) announced a £9.1bn compensation scheme for the millions of victims of the scandal.
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