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.
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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.
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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%.
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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.
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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.
Cornell University administrator Warren Petrofsky will serve as the Faculty of Arts and Sciences’ new dean of administration and finance, charged with spearheading efforts to shore up the school’s finances as it faces a hefty budget deficit.
Petrofsky’s appointment, announced in a Friday email from FAS Dean Hopi E. Hoekstra to FAS affiliates, will begin April 20 — nearly a year after former FAS dean of administration and finance Scott A. Jordan stepped down. Petrofsky will replace interim dean Mary Ann Bradley, who helped shape the early stages of FAS cost-cutting initiatives.
Petrofsky currently serves as associate dean of administration at Cornell University’s College of Arts and Sciences.
As dean, he oversaw a budget cut of nearly $11 million to the institution’s College of Arts and Sciences after the federal government slashed at least $250 million in stop-work orders and frozen grants, according to the Cornell Daily Sun.
He also serves on a work group established in November 2025 to streamline the school’s administrative systems.
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Earlier, at the University of Pennsylvania, Petrofsky managed capital initiatives and organizational redesigns in a number of administrative roles.
Petrofsky is poised to lead similar efforts at the FAS, which relaunched its Resources Committee in spring 2025 and created a committee to consolidate staff positions amid massive federal funding cuts.
As part of its planning process, the committee has quietly brought on external help. Over several months, consultants from McKinsey & Company have been interviewing dozens of administrators and staff across the FAS.
Petrofsky will also likely have a hand in other cost-cutting measures across the FAS, which is facing a $365 million budget deficit. The school has already announced it will keep spending flat for the 2026 fiscal year, and it has dramatically reduced Ph.D. admissions.
In her email, Hoekstra praised Petrofsky’s performance across his career.
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“Warren has emphasized transparency, clarity in communication, and investment in staff development,” she wrote. “He approaches change with steadiness and purpose, and with deep respect for the mission that unites our faculty, researchers, staff, and students. I am confident that he will be a strong partner to me and to our community.”
—Staff writer Amann S. Mahajan can be reached at [email protected] and on Signal at amannsm.38. Follow her on X @amannmahajan.
My spreadsheet reviewed a WalletHub ranking of financial distress for the residents of 100 U.S. cities, including 17 in California. The analysis compared local credit scores, late bill payments, bankruptcy filings and online searches for debt or loans to quantify where individuals had the largest money challenges.
When California cities were divided into three geographic regions – Southern California, the Bay Area, and anything inland – the most challenges were often found far from the coast.
The average national ranking of the six inland cities was 39th worst for distress, the most troubled grade among the state’s slices.
Bakersfield received the inland region’s worst score, ranking No. 24 highest nationally for financial distress. That was followed by Sacramento (30th), San Bernardino (39th), Stockton (43rd), Fresno (45th), and Riverside (52nd).
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Southern California’s seven cities overall fared better, with an average national ranking of 56th largest financial problems.
However, Los Angeles had the state’s ugliest grade, ranking fifth-worst nationally for monetary distress. Then came San Diego at 22nd-worst, then Long Beach (48th), Irvine (70th), Anaheim (71st), Santa Ana (85th), and Chula Vista (89th).
Monetary challenges were limited in the Bay Area. Its four cities average rank was 69th worst nationally.
San Jose had the region’s most distressed finances, with a No. 50 worst ranking. That was followed by Oakland (69th), San Francisco (72nd), and Fremont (83rd).
The results remind us that inland California’s affordability – it’s home to the state’s cheapest housing, for example – doesn’t fully compensate for wages that typically decline the farther one works from the Pacific Ocean.
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A peek inside the scorecard’s grades shows where trouble exists within California.
Credit scores were the lowest inland, with little difference elsewhere. Late payments were also more common inland. Tardy bills were most difficult to find in Northern California.
Bankruptcy problems also were bubbling inland, but grew the slowest in Southern California. And worrisome online searches were more frequent inland, while varying only slightly closer to the Pacific.
Note: Across the state’s 17 cities in the study, the No. 53 average rank is a middle-of-the-pack grade on the 100-city national scale for monetary woes.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
The up-and-coming fintech scored a pair of fourth-quarter beats.
Diversified fintech Chime Financial(CHYM +12.88%) was playing a satisfying tune to investors on Thursday. The company’s stock flew almost 14% higher that trading session, thanks mostly to a fourth quarter that featured notably higher-than-expected revenue guidance.
Sweet music
Chime published its fourth-quarter and full-year 2025 results just after market close on Wednesday. For the former period, the company’s revenue was $596 million, bettering the same quarter of 2024 by 25%. The company’s strongest revenue stream, payments, rose 17% to $396 million. Its take from platform-related activity rose more precipitously, advancing 47% to $200 million.
Image source: Getty Images.
Meanwhile, Chime’s net loss under generally accepted accounting principles (GAAP) more than doubled. It was $45 million, or $0.12 per share, compared with a fourth-quarter 2024 deficit of $19.6 million.
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On average, analysts tracking the stock were modeling revenue below $578 million and a deeper bottom-line loss of $0.20 per share.
In its earnings release, Chime pointed to the take-up of its Chime Card as a particular catalyst for growth. Regarding the product, the company said, “Among new member cohorts, over half are adopting Chime Card, and those members are putting over 70% of their Chime spend on the product, which earns materially higher take rates compared to debit.”
Today’s Change
(12.88%) $2.72
Current Price
$23.83
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Key Data Points
Market Cap
$7.9B
Day’s Range
$22.30 – $24.63
52wk Range
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$16.17 – $44.94
Volume
562K
Avg Vol
3.3M
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Gross Margin
86.34%
Double-digit growth expected
Chime management proffered revenue and non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance for full-year 2026. The company expects to post a top line of $627 million to $637 million, which would represent at least 21% growth over the 2024 result. Adjusted EBITDA should be $380 million to $400 million. No net income forecasts were provided in the earnings release.
It isn’t easy to find a niche in the financial industry, which is crowded with companies offering every imaginable type of service to clients. Yet Chime seems to be achieving that, as the Chime Card is clearly a hit among the company’s target demographic of clientele underserved by mainstream banks. This growth stock is definitely worth considering as a buy.
