These come as the FCA announced that compensation payouts will apply to around 12.1 million motor finance agreements, with an average payment of £829 per case. This is higher than the £700 estimate included in earlier proposals, meaning many motorists could receive more than they first expected. However, the final scheme also reduces the number of eligible agreements by around two million.

The X post read: “Car Finance NEWS: Its just out, on scan reading, most big picture stuff is what we knew. A few things stand out on cursory reading (un-fact checked)…

• Average payout up from £700 to £830 per agreement,
• Fewer agreements estimated to be missold 14m down to 12.1m (I need to work out why)
• The interest rate is still base rate + 1%, which I was lobbying to be increased, they have moved a little now setting a minimum 3% per year
• Higher payouts on pre 2014 car finance”

Lewis also pointed out there may have been a practical reason behind the adjustments. He has previously warned that lower proposed payouts risked pushing consumers to take legal action instead of using the official scheme, which could have overwhelmed the courts.

The updated figures appear to slightly rebalance that risk.

In total, the FCA expects the redress scheme to return about £7.5 billion to consumers who were unfairly treated when taking out car finance deals.

The scheme covers agreements made between 2007 and 2024 and focuses on cases where customers may have paid more due to hidden commission arrangements.

FCA chief executive Nikhil Rathi said: “We’ve listened to feedback to make sure the scheme is fair for consumers and proportionate for firms. It will put £7.5 billion back into people’s pockets.

“Now we need everyone to get behind it and ensure millions get their money this year.

“Payouts should not be delayed any longer, especially as household bills come under greater pressure.”