The Financial Conduct Authority (FCA) is poised to announce a compensation plan for millions of UK motorists who were potentially mis-sold car finance agreements between April 2008 and January 2020. The FCA launched a review in 2020 into the way firms sold car finance products, specifically examining whether customers were given appropriate information about how their payments would be used.

The investigation focused on the potential mis-selling of commission incentives paid to car dealerships, which could have influenced the pricing of loans. The review considered whether firms failed to adequately inform customers that dealerships received commission based on the value of the finance product sold, and whether this could have led to customers paying more than they should have. The FCA's findings suggested widespread issues with how this information was communicated, with many customers being unaware of the commission structure.

The compensation scheme aims to provide redress to customers who were negatively impacted by the mis-selling. The exact form of compensation and the eligibility criteria will be outlined in the FCA's final publication, which is expected to be released on Monday afternoon. The announcement has been eagerly awaited by consumer groups and affected motorists, who have been seeking clarity on how they can claim compensation. The FCA's decision will determine the scope and scale of the redress programme, potentially impacting a significant number of individuals across the UK.