The FCA’s motor finance redress scheme is partly suspended due to ongoing legal challenges, with a February hearing expected to determine its fate and timing of payments, while the regulator encourages early settlements to resolve liabilities.

In March, the FCA announced a £9.1 billion compensation scheme for car finance mis-selling victims, which remains partly suspended as litigation unfolds; a February hearing will decide the scheme’s viability and payment timelines.

Barclays will apply the FCA’s redress methodology to calculate early settlement offers and will tailor them to the specifics of each motor loan agreement.

Barclays Partner Finance customers whose complaints about motor finance commissions were acknowledged by 1 October 2026 will be contacted soon with details on how offers are calculated and how to accept them.

The largest mis-selling category involves dealers and brokers increasing interest rates to boost commissions, a core factor in how compensation under the FCA scheme is calculated.

Lenders are required to show that voluntary compensation offers at least match the maximum redress payable under the FCA scheme.

Barclays has set aside £430 million related to motor finance mis-selling, but it has not disclosed how many customers will receive early settlement offers or how many people could be affected.

The 17-year mis-selling saga has involved major banks and the finance arms of vehicle manufacturers, marking one of Britain’s costliest mis-selling episodes.

Offers will be calculated using the FCA’s model, are optional, and recipients can accept or reject within one month; accepting an offer ends further claims on that specific agreement.

Barclays became the first UK bank to publish full and fair settlement offers for a group of customers, aiming to resolve parts of the mis-selling saga.

Payouts are designed to mirror what the ongoing FCA compensation scheme would deliver, reducing the risk of lowball offers but still contingent on the final litigation outcomes.

Barclays Partner Finance will begin early settlements for tens of thousands of customers who allege mis-sold car loans, with payments potentially arriving before Christmas.