Barclays offers early payouts to some customers in car finance scandal

Barclays has become the first bank to offer early compensation payouts to some customers affected by a car finance mis-selling scandal, dailymail.com reported. The bank's finance arm will make early settlement offers to customers whose complaints were acknowledged on or before October 1, 2026.

The compensation scheme was launched by the Financial Conduct Authority (FCA) earlier this year, with an estimated average payout of £829 per customer as part of a £9 billion redress effort. The dispute centers on car dealers who received commissions from banks and lenders for selling motor finance packages between 2007 and 2024, sometimes incentivized to sell more expensive deals.

Payouts under the scheme were scheduled to begin this year but were partially suspended due to legal challenges from finance arms of Volkswagen and Mercedes. Barclays plans to contact a limited group of customers soon, representing a small portion of its total £430 million compensation liability.

Customers receiving early settlement offers will have at least one month to respond, as per FCA rules. If they accept, they cannot seek additional compensation. Those who decline or do not respond will receive further information after an Upper Tribunal hearing scheduled for February, which may affect the size or availability of offers.

A Barclays Partner Finance spokesperson said the bank recognizes some customers have waited a long time and aims to provide quicker redress options through these early settlements.