Mon, 13 Oct 2025

Mon, 13 Oct 2025 Lloyds warns car finance scandal could cost it £2bn

The bank has set aside an additional £800m, saying the number of eligible claims is expected to be higher than previously thought.
Lloyds Banking Group has set aside an additional £800m for car finance compensation claims, bringing the total allocated for redress to nearly £2bn. The bank expects a higher number of eligible claims than previously thought, and its "best estimate" of the total cost is £1.95bn. According to the Financial Conduct Authority (FCA), payouts could be due on around 14 million unfair deals, averaging at about £700 each. This could result in lenders paying out a total of £8.2bn in compensation. The proposed scheme would be free to access for consumers, although the interest they receive on redress will be much lower than that paid following the PPI scandal. Lloyds and another lender, Close Brothers, have said they may need to set aside more money for payouts due to the FCA's proposals. Consumer campaigners have urged lenders not to fight the FCA's compensation plans.
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