Finance

Car finance: what is the FCA looking into and will people get money back?

Published

2 years ago

January 11, 2024

Car finance: what is the FCA looking into and will people get money back?

The financial watchdog has announced that it is investigating the car loans market to see if commission payments to brokers were too high. If the Financial Conduct Authority (FCA) finds against the brokers, it could trigger payouts to potentially millions of car buyers.

What car finance is the FCA looking at?

The loans in question were taken out by people buying new and secondhand cars, probably in the form of hire purchase plans or personal contract purchase (PCP) plans – both of which involve making repayments over a long period.

In recent years PCPs have been used by about eight in 10 new car buyers. They are also offered by big secondhand dealers, including those online.

When a car buyer uses a PCP they pay a deposit and take out a loan for a set period – maybe three or four years. The loan is not for the price of the car, but for how much it will depreciate during the period.

During that time they make monthly repayments and at the end of the loan period are given the option of making a final, “balloon”, payment to own the car, or handing it back and starting a new plan.

So if, for example, the new car is advertised at £20,000 and the dealer judges it will be worth £12,000 after three years and the buyer pays a deposit of £2,000, they will take a loan for £6,000 over the three-year period.

The FCA is looking at finance plans used to buy a car before 28 January 2021.

Personal contract hire (PCH) plans are not affected.

What are the FCA’s concerns?

Overcharging, essentially.

People buying a car through a plan would typically use an intermediary – for example, the dealer – to arrange the finance. Before January 2021 some of the lenders providing the finance used to allow these middlemen, referred to as brokers, to adjust the interest rates they charged customers.

Some brokers had “discretionary commission arrangements”, which meant they were paid more if the interest rate was higher, and so they had an incentive to make the loan more expensive for the customer.

What has prompted the investigation?

Customers who took out loans before 2021 have been complaining to lenders and brokers, encouraged by claims management firms. Most have been turned away. About 10,000 have taken their complaints to the Financial Ombudsman Service, the organisation that settles disputes between financial firms and consumers.

It has decided on two cases, and in both found that the way the commission arrangement between the lender and the car dealer worked was unfair to the consumer.

The FCA is clearly concerned that these are not isolated incidents.

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How much has been overpaid?

It will vary from case to case as it seems some lenders gave brokers a wide choice of interest rates to apply.

In one of the ombudsman cases, the buyer was found to have been charged an interest rate of 5.5% when she would have paid 2.9% without the broker’s commission. In the second, the driver paid 4.67% when without commission the rate was 2.68%.

To give you an idea, on a £5,000 loan arranged over three years the difference in cost between rates of 2.9% and 5.5% is about £200.

Will I get a refund?

Not if you bought your car on or after 28 January 2021.

Otherwise you might. The FCA says that if it does find “widespread misconduct” and that consumers have lost out it will work out how to compensate people – it could be that it orders a return of whatever extra interest is calculated to have been paid over the loan period.

That is some way off at the moment. In the meantime, you do not need to do anything – in fact, complaints have been paused so nothing will be done until the end of the process.

A claims management company has called. Shall I use it?

No. You will have to pay a fee if you use a company to make your claim – it typically comes out of the payout.

If you haven’t made a complaint about this issue previously, you could wait to see what happens to the FCA investigation. If it finds bad practice it may order brokers to proactively contact customers who were affected to arrange compensation.

But it could tell them to reimburse the customers who have complained – and there is a time limit on complaints. Generally, you need to complain to your provider within six years of a problem happening or within three years of you becoming aware that you had cause to complain. If you think you could be running out of time, you should consider complaining to your provider now.

For anyone who has complained to a lender or broker and had that dismissed between 12 July 2023 and 10 January 2024, the FCA has extended the period in which you can take your complaint to the Financial Ombudsman from six to 15 months.

Finance

New Funding Models Needed As Global Health Faces Growing Financial Strain – Health Policy Watch

Published

9 hours ago

March 28, 2026

Press Room

New Funding Models Needed As Global Health Faces Growing Financial Strain – Health Policy Watch

Christoph Benn (left) and Patrick Silborn

Global health is facing a funding crisis. Aid is shrinking, debt is rising, and the needs are only increasing. According to Christoph Benn of the Joep Lange Institute and Patrik Silborn of UNICEF Afghanistan, health systems will need to fundamentally rethink how they finance and sustain care.

On a recent episode of the Global Health Matters podcast, host Gary Aslanyan was joined by these two experts, who said “innovative finance” has become central to discussions on sustaining health systems.

Benn said that while the term is widely used, few agree on what it actually means. He described it as a “spectrum” of approaches, ranging from philanthropic grants and conditional funding to private-sector investment models that expect financial returns.

“It has frustrated us deeply that so many people are talking about innovative finance, but very few actually know what they’re talking about,” Benn said.

Silborn emphasised that these mechanisms should not be treated as one-size-fits-all solutions. Instead, financing models must be designed around specific problems whether that means raising new funds, improving efficiency, or linking payments to measurable outcomes.

Drawing on his experience in Rwanda, Silborn described how a results-based funding model tied disbursements directly to performance, helping the country to maintain progress against major diseases despite reduced funding.

Both experts stressed that private-sector engagement requires a clear understanding of incentives.

“Private corporations are not charities,” Benn said. They can, however, contribute through marketing partnerships, technical expertise, or investment models that align financial returns with social outcomes.
Looking ahead, Benn pointed to targeted taxes and debt swaps as among the most scalable tools. Still, both warned that innovative finance is not a substitute for public responsibility.

“It only works when it is designed to solve real problems in specific contexts,” Benn said, underscoring that strong systems and governance remain essential to any lasting solution.

Listen to the full episode >>

Read more about Global Health Matters podcasts on Health Policy Watch >>

Image Credits: Global Health Matters podcast.

Combat the infodemic in health information and support health policy reporting from the global South. Our growing network of journalists in Africa, Asia, Geneva and New York connect the dots between regional realities and the big global debates, with evidence-based, open access news and analysis. To make a personal or organisational contribution click here.

Finance

Coalition urges lawmakers to advance South Carolina Financial Freedom Act

Published

22 hours ago

March 27, 2026

Press Room

Coalition urges lawmakers to advance South Carolina Financial Freedom Act

COLUMBIA, S.C. (WCIV) — Dozens of local elected officials from across South Carolina are urging state lawmakers to pass legislation that would allow cities, counties and school districts to deposit taxpayer funds in the financial institution of their choice, including qualified credit unions.

The Palmetto Public Deposits Coalition, formed by more than 40 mayors, county council members and municipal leaders have signed a joint letter calling on the General Assembly to advance the South Carolina Financial Freedom Act, a bill that, if signed, would lift long-standing restrictions that require public entities to deposit funds exclusively in commercial banks, even though state law already allows credit unions to accept public deposits.

The coalition argues the current system limits competition and prevents local governments from seeking potentially better rates, lower fees and more responsive service.

READ MORE | Lowcountry residents feel squeeze as inflation rises 25% over five years

“Local governments should have the same financial freedom that families and businesses have — the ability to choose the financial institution that best meets their needs,” Rick Osborn, chairman of the Palmetto Public Deposits Coalition, explained. “This commonsense reform will introduce healthy competition, help stretch taxpayer dollars further, and strengthen partnerships with community-focused financial institutions that are deeply invested in South Carolina.”

The efforts also won support from the South Carolina Association of Counties and the Municipal Association of South Carolina, whose boards have formally endorsed expanding deposit options. Their backing signals broad agreement among local government officials that the law should be modernized.

In their letter to lawmakers, the coalition argued that permitting credit unions to hold public deposits would restore financial choice and improve outcomes for residents.

“This legislation is about giving local leaders more tools to serve residents effectively and make responsible financial decisions,” said Goose Creek Mayor Greg Habib, one of the signatories.

READ MORE | Treasury to hold conferences on AI regulation reductions for banks

The Financial Freedom Act would allow, but not require, public entities to deposit funds in qualified credit unions. Coalition members said the bill is not designed to favor one type of institution over another, but to encourage competition in a market currently limited to commercial banks, many of which operate outside the state.

The Palmetto Public Deposits Coalition said it will continue working with local leaders, state associations and lawmakers as the legislation moves through the current session.

Finance

FTSE 100 LIVE: Stocks muted as Trump delays strikes on Iran power plants

Published

1 day ago

March 27, 2026

Press Room

FTSE 100 LIVE: Stocks muted as Trump delays strikes on Iran power plants

The FTSE 100 (^FTSE) was hovering around the flatline on Friday, while European stocks headed lower, as traders shrugged off Donald Trump’s latest pause on striking Iran’s energy infrastructure.

On Thursday night, the US president extended the deadline for Iran to open the strait of Hormuz by 10 days, meaning the new date would be 6 April. He claimed that talks were “going very well”. However, Iran denied it was “begging to make a deal”, despite Trump’s earlier claims.

It comes after Wall Street posted its biggest daily loss since the Iran war began on Thursday.

The Wall Street Journal also reported on Thursday that the US was considering sending as many as 10,000 additional troops to the Middle East.

Tony Sycamore, market analyst at IG, said Trump has extended the uncertainty gripping markets.

“While the rhetoric around de-escalation and dialogue is certainly preferable to outright conflict, the market appears to be growing increasingly numb to President Trump’s verbal reassurances. By extending the deadline, it effectively kicks the can down the road, pushing back any concrete resolution regarding the reopening of the Strait of Hormuz. This, in turn, simply extends the uncertainty weighing on markets and the broader global economy.”

Elsewhere, UK retail sales dipped by 0.4% in February, following a rise of 2.0% in January, the Office for National Statistics revealed. In the December to February quarter, sales volumes were up 0.7% compared with the previous three months.

London’s benchmark index (^FTSE) was hovering around the flatline in early trade
Germany’s DAX (^GDAXI) dipped 0.5% and the CAC (^FCHI) in Paris headed 0.2% into the red
The pan-European STOXX 600 (^STOXX) was down 0.3%
Wall Street is set for a muted start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all lacklustre.
The pound was 0.1% down against the US dollar (GBPUSD=X) at 1.3311

Follow along for live updates throughout the day:

LIVE 4 updates

Consumer confidence in Britain slips in March

GfK revealed on Friday that the UK confidence index fell two points to -21 in March – the weakest level since Donald Trump announced sweeping import tariffs in April last year. At the time, the index sank to -23.
Neil Bellamy, the firm’s consumer insights director, said the survey showed people are concerned about the prospects for inflation and the economy.
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The group said the sharp rise in energy prices caused by the effective closure of the strait of Hormuz and attacks on infrastructure in the region “has led to fears of higher inflation and weaker growth across oil-importing countries”.
A majority of respondents said the economy had improved modestly over the last year, but was about to decline significantly. They said they were likely to save more and spend less on big ticket items over the next 12 months as a result.
UK retail sales dip amid wet weather and weaker supermarket trading

UK retail sales decreased in February as supermarket sales slipped and demand for household goods was impacted by wet weather, according to official figures.
The Office for National Statistics (ONS) said the total volume of retail sales, which measures the quantity bought, fell by 0.4% last month.
It compared with a 2% rise in January, which was revised up from a previous estimate of 1.8%.
The monthly decline in February was nevertheless shallower than expected, with analysts having predicted a drop of 0.7% for the month.
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A fall in supermarket sales partly contributed to the fresh monthly decline, falling by 0.6%.
All food stores, which includes convenience stores and specialist retailers, reported a 0.7% decline in sales volumes, marking the weakest level since August last year.
Elsewhere, the data showed that household goods stores saw weaker demand, dropping by 2.6%, with retailers partly blaming “wet weather” for reduced demand.
Met Office data indicated that the UK, had above average rainfall in February 2026, more so than in either January this year or the previous February.
Non-store retailers also reported a slight dip over the month, with retailers suggesting that consumers brought forward spending to January to make the most of post-Christmas discounts.
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Matt Dalton, consumer sector leader at Forvis Mazars, said:
Asia and US overnight

Stocks in Asia were mixed overnight, stuck in a wait and see mode, with the Nikkei (^N225) fell 0.4% on the day in Japan, while the Hang Seng (^HSI) rose 0.4% in Hong Kong.
The Shanghai Composite (000001.SS) was 0.6% up by the end of the session and in South Korea, the Kospi (^KS11) lost 0.4% on the day. Part of the Kospi’s weakness was also due to the ongoing sell-off in South Korean chipmaker stocks from Google’s memory chip announcement.
Across the pond, the S&P 500 (^GSPC) slipped 1.7%, and the tech-heavy Nasdaq (^IXIC) was 2.4% down, both seeing their biggest declines since the start of the war and fell back to their lowest levels since September. The Dow Jones (^DJI) ended 1% lower, while the VIX index rose 2.11 points to 27.44pts, its highest since 6 March.
Part of the Wall Street selloff was also driven by the ongoing rout from Tuesday’s announcement that Google had found a new algorithm that could reduce the memory chip amount needed in AI models.
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Coming up

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and what’s happening across the global economy.
To the day ahead we’ll get the US March Kansas City Fed services activity, UK February retail sales. Central bank events include the ECB consumer expectations survey, and the Fed’s Daly and Paulson will speak.
Here’s a snapshot of what’s on the agenda today:

7am: UK retail sales for February

9am: ECB Consumer Inflation Expectations survey

2pm: University of Michigan consumer confidence report