UK banks and financial institutions are setting aside vast sums of money in anticipation of a potential onslaught of claims related to mis-sold PCP and Hire Purchase (HP) car finance agreements. With billions of pounds at stake, financial providers are preparing for what could be one of the most significant compensation payouts in UK banking history.

If you financed a car before January 28, 2021, you may have unknowingly overpaid on interest, and banks are preparing to pay out. Here’s why thousands of claims are already in the pipeline—and why you should check if you qualify before the rush.

Why Are Banks Setting Aside Billions?
For years, many high street banks, car dealerships, and brokers operated under discretionary commission arrangements (DCAs), allowing dealers to manipulate interest rates to maximize their commission—at the customer’s expense.

The Financial Conduct Authority (FCA) banned this practice in 2021, but millions of motorists may have already been overcharged before that date. The full scale of the issue came into focus after a landmark ruling by the Court of Appeal in October 2024, which found that brokers and dealerships had to obtain fully informed consent before receiving commission payments from lenders.

With a Supreme Court ruling expected in April 2025, the banking industry is bracing for billions in compensation payouts.

Banks Have Already Allocated Over £1.29 Billion for Claims
Lloyds Banking Group Prepares for Massive Payouts

Lloyds Banking Group has nearly tripled its compensation provision to £1.2 billion, adding an additional £700 million to cover potential payouts. The scale of Lloyds’ financial exposure underscores the growing concerns surrounding the legal and financial fallout of the mis-selling scandal. Lloyds owns motor finance company Black Horse, a key player in the UK motor finance market.

Other Banks Bracing for Financial Impact
Lloyds isn’t the only bank making major provisions:

• Santander – £295 million allocated.
• Barclays – £90 million set aside.
• Close Brothers – Up to £165 million expected in legal and compensation costs.

Some analysts predict that final compensation costs could rival the Payment Protection Insurance (PPI) scandal, which forced UK banks to pay over £50 billion in refunds.

The FCA Has Extended the Response Deadline—But You Should Act Fast
To manage the surge in complaints, the FCA has extended the deadline for finance companies to respond to mis-sold PCP claims until December 4, 2025.

This does not mean you should wait to submit your claim. Thousands upon thousands of claims are already in the pipeline, and delaying could mean you end up at the back of a long queue once compensation payouts begin.

Here’s why submitting your claim early is crucial:

• Banks are already setting aside funds—but these are likely to be depleted quickly once payouts begin.
• Claims are processed on a first-come, first-served basis—getting in early ensures faster resolution.
• With more claims expected after the Supreme Court ruling, the backlog could grow significantly.
• It only takes 60 seconds to check if you qualify—start your claim today!

Who Can Make a Claim?

• You may be entitled to compensation if you:
• Took out PCP or Hire Purchase (HP) car finance before January 28, 2021.
• Were not properly informed about how the dealership or broker was paid commission.
• Paid a higher interest rate than necessary due to commission-based pricing.

How much could you claim?
The FCA estimates that for a £10,000 finance deal, mis-sold commission agreements could have cost borrowers an extra £1,100 in interest over four years. Some claims could be worth thousands of pounds.

How to Check If You’re Owed Money

• Many motorists are completely unaware that they were mis-sold finance, but checking is quick, easy, and risk-free:
• Complete a 60-second eligibility check.
• Our team assesses your case and manages the claim process.
• No win, no fee—if your claim is unsuccessful, you don’t pay a penny.

PCP Claims FAQ – Answering Your Key Questions
The FCA has extended the response deadline—should I still submit my claim now?
Yes! The extension only applies to how long finance companies have to respond—it does not mean you should delay submitting a claim.

Why submit now?

• Banks are already allocating billions for compensation—claims are happening, and you want to be ahead of the queue.
• Waiting could mean longer processing times—early claims are reviewed first.
• More claims are expected after April 2025—don’t risk further delays.

How do I know if I was mis-sold PCP car finance?

• You may have been mis-sold if:
• You took out PCP or HP finance before 2021.
• You were not told about commission arrangements.
• You paid a higher interest rate than necessary without being informed.

How much could I be owed?
Your payout depends on the loan amount and interest rate, but customers may be entitled to thousands of pounds in compensation. The FCA estimates that mis-sold finance deals could have cost borrowers £1,100 or more in excess interest.

What if I no longer have my car?
You can still claim. The focus is on the finance agreement itself, not whether you still own the vehicle.

Do I have to pay anything upfront?
No upfront costs—your claim is handled on a no-win, no-fee basis. You only pay if you win compensation.

How long does the claims process take?
With banks already setting aside over £1.29 billion, compensation payouts could begin rolling out soon. The sooner you register, the sooner your claim is processed.

This could be one of the biggest consumer compensation payouts in UK history. If you had a car finance deal before 2021, don’t leave money on the table—check your eligibility today!