Mis-Sold Car Finance Claims: Where Things Stand
Bott and Co understand many of our clients are eager for updates regarding mis-sold car finance claims.
The FCA is finalising its compensation scheme. Here’s everything you need to know about the timeline, the process, and what we’re doing for you.
What’s happening with motor finance claims?
If you took out car finance between April 2007 and November 2024 using a personal contract purchase (PCP), hire purchase (HP), or conditional sale agreement, you may be owed compensation. The issue relates to undisclosed or excessive commission payments made by lenders to car dealers, which meant many consumers overpaid without knowing it.
Following the Supreme Court ruling in August 2025, which confirmed that lenders acted unfairly by failing to adequately disclose commission arrangements, the Financial Conduct Authority (FCA) set out to design a nationwide compensation scheme. The FCA estimates approximately 14 million agreements may be affected, with total compensation potentially reaching up to £8.2 billion.
Mis-sold Car Finance Key Dates
The FCA consulted on its proposed redress scheme between October and December 2025. That consultation is now closed and the regulator is finalising its position.
| Date | Significant Development |
|---|---|
| Dec 2025 | FCA consultation on the redress scheme closed (12th December 2025). |
| By end of March 2026 | FCA publishes final rules, confirming eligibility criteria, how compensation is calculated, and when payments begin. |
| 31st May 2026 | The complaint-handling pause lifts. Lenders must begin issuing final responses to complaints. |
| Before end of 2026 | Consumers expected to start receiving compensation payments. |
Why has there been a pause?
The FCA paused complaint handling in January 2024 to prevent disorderly, inconsistent outcomes. Without a pause, lenders would have handled complaints in very different ways, potentially disadvantaging some consumers. The pause ensures all claims are treated equally under standardised rules once the scheme is finalised.
The pause was originally due to expire in December 2025 but has been extended to 31st May 2026, brought forward from a previously proposed date of 31st July 2026, reflecting the FCA’s commitment to resolving claims as quickly as possible.
What is Bott and Co doing?
Your claim is registered and being actively managed by our specialist motor finance team. While the FCA’s pause means lenders are not yet required to issue final responses, we have not been idle:
- Preparing your file: All documentation and evidence is being reviewed and organised so your claim can be progressed without delay when the scheme launches.
- Monitoring developments: Our legal team tracks every FCA publication and consultation response to ensure we’re fully prepared.
- Ready to act: Once the FCA publishes final rules, we’ll be in a position to progress your claim swiftly.
You don’t need to do anything right now. Your claim is lodged and we’re managing it. There is no advantage to instructing another firm, it would not speed up the process and could result in unnecessary costs.
How will the compensation scheme work?
Who is covered?
The scheme covers regulated motor finance agreements (PCP, HP, conditional sale) taken out between 6th April 2007 and 1st November 2024 where commission was paid by the lender to the broker and was not adequately disclosed.
What types of unfairness?
The FCA has identified three key situations: discretionary commission arrangements (DCAs) where interest rates could be varied without disclosure; excessive commission (35%+ of total credit cost and 10%+ of the amount borrowed); and undisclosed contractual ties giving lenders exclusivity with a broker.
How much compensation?
The FCA estimates an average of approximately £700 per agreement, though individual amounts vary. Compensatory interest will also apply.
How is it delivered?
Lenders deliver the scheme directly. Consumers who have already complained (including through solicitors like Bott and Co will be automatically included unless they opt out to pursue a court claim instead.
Mis-sold Car Finance Claims FAQs
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No. Your complaint has been submitted and is being managed by Bott and Co. Once the pause lifts and the scheme is operational, we will progress your claim on your behalf.
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No, your claim is already lodged and changing representative would not speed things up and in fact will likely slow things down and increase the costs you may have to pay.
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We will contact you once the FCA publishes its final rules (expected by end of March 2026) or sooner if there is a significant development.
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Each eligible agreement is assessed separately. If you had multiple deals within the scheme’s scope, you may be entitled to compensation for each one.
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Please forward any communication from your lender to us so we can review and advise. Do not accept any offer without speaking to us first.
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Email motorfinanceclaims@bottonline.co.uk who aim to respond within 1 working day
In your email, include:
Your full name
Your claim reference number (if you have it)
Please also be aware there is an FCA “complaints pause” in place until 31 May 2026, which means lenders are not yet giving final responses on motor finance complaints. This can make everything feel very slow, even when work is happening in the background. -
Please email our Motor Finance department and they will be able to assist you.
Motorfinanceclaims@bottonline.co.uk
In your email, include:
Your full name
Your claim reference number (if you have it)
Please also be aware there is an FCA “complaints pause” in place until 31 May 2026, which means lenders are not yet giving final responses on motor finance complaints. This can make everything feel very slow, even when work is happening in the background.