Low-Income Drivers Excluded from £830 Compensation Scheme
Huge group of drivers won't get payments as millions handed £830 each

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A significant number of low-income drivers in the UK may miss out on £830 compensation payments due to the Financial Conduct Authority's (FCA) scheme, which excludes around 1.1 million low-value car finance agreements. These agreements, often used for cheaper vehicles, are deemed fair based on low commission thresholds.
- 01Approximately 1.1 million low-value car finance agreements are excluded from the FCA's compensation scheme.
- 02The FCA considers commissions below £120 (before April 2014) and £150 (after) as fair, leading to exclusion from payouts.
- 03The average compensation payout is expected to be around £830, but actual amounts may vary based on individual agreements.
- 04Consumer law firm Slater and Gordon highlights that excluded drivers are typically low-income individuals purchasing cheaper cars.
- 05Legal challenges against the FCA's scheme are ongoing, creating uncertainty for millions awaiting compensation.
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The Financial Conduct Authority (FCA) has announced a compensation scheme for consumers mis-sold car loans, with average payouts expected to be around £830. However, a significant group of low-income drivers, specifically those with low-value car finance agreements, are likely to miss out on these payments. Analysis by Slater and Gordon reveals that approximately 1.1 million such agreements will not qualify for compensation due to low commission thresholds set by the FCA. Agreements with commissions below £120 (before April 2014) and £150 (after) are considered fair and excluded from the scheme. This disproportionately affects financially stretched consumers who often borrowed smaller amounts for cheaper vehicles. Elizabeth Comley, COO of Slater and Gordon, emphasized that these drivers are the ones who can least afford to lose out. Additionally, the FCA is facing legal challenges from both consumers and lenders regarding the compensation plans, which could delay payouts for millions. Despite the ongoing legal disputes, the FCA maintains that its scheme is fair and encourages consumers to contact their lenders directly regarding potential compensation.
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Low-income drivers who relied on small loans for purchasing vehicles may not receive compensation, affecting their financial stability.
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