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Thousands of motorists who bought cars on finance before 2021 could be set for payouts as the Financial Conduct Authority (FCA) has said it will consult on a compensation scheme.

In a statement released on Sunday, the FCA said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.

“Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way,” the statement continued.

Read more: How to tell if you’ve been mis-sold car finance

The FCA said it estimates the cost of any scheme, including compensation and administrative costs, to be no lower than £9bn – adding that a total cost of £13.5bn is “more plausible”.

It estimates most individuals will probably receive less than £950 in compensation.

The consultation will be published by early October and any scheme will be finalised in time for people to start receiving compensation next year.

What motorists should do next

The FCA says you may be affected if you bought a car under a finance scheme, including hire purchase agreements, before 28 January 2021.

Anyone who has already complained does not need to do anything.

The authority added: “Consumers concerned that they were not told about commission, and who think they may have paid too much for the finance, should complain now.”

Its website advises drivers to complain to their finance provider first.

If you’re unhappy with the response, you can then contact the Financial Ombudsman.

The FCA has said any compensation scheme will be easy to participate in, without drivers needing to use a claims management company or law firm.

It has warned motorists that doing so could end up costing you 30% of any compensation in fees.

The announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.

The court overturned a ruling that would have meant millions of motorists could have been due compensation for over “secret” commission payments made to car dealers as part of finance arrangements.

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Car finance scandal explained

The FCA’s case concerns discretionary commission arrangements (DCAs) – a practice banned in 2021.

Under these arrangements, brokers and dealers increased the amount of interest they earned without telling buyers and received more commission for it. This is said to have then incentivised sellers to maximise interest rates.

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In light of the Supreme Court’s judgment, any compensation scheme could also cover non-discretionary commission arrangements, the FCA has said. These arrangements are ones where the buyer’s interest rate did not impact the dealer’s commission.

This is because part of the court’s ruling “makes clear that non-disclosure of other facts relating to the commission can make the relationship [between a salesperson and buyer] unfair,” it said.

While it’s unclear exactly how many motorists could be eligible for any compensation, it was previously estimated that about 40% of car finance deals included DCAs.

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Prince Harry cleared of bullying claims by report into ‘damaging dispute’ at his charity

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Prince Harry cleared of bullying claims by report into 'damaging dispute' at his charity

The Charity Commission has found no evidence of bullying or harassment at a charity set up by Prince Harry.

But it has found that an internal dispute at Sentebale “severely impacted the charity’s reputation”.

Earlier this year its chair, Dr Sophie Chandauka, accused the Duke of Sussex of “harassment and bullying at scale”.

Her comments followed the departure of the prince and several others from the organisation in March.

They had asked her to step down, alleging it was in the “best interest of the charity”.

Dr Chandauka told Sky News that Harry had “authorised the release of a damaging piece of news to the outside world” without informing her or Sentebale directors.

The Duke and Duchess of Sussex declined to offer any formal response.

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Why was Prince Harry accused of ‘bullying’?

‘Strong perception of ill-treatment’

The Charity Commission said it was reporting after a “damaging internal dispute emerged” and has “criticised all parties to the dispute for allowing it to play out publicly”.

That “severely impacted the charity’s reputation and risked undermining public trust in charities more generally”, it said.

But it found no evidence of “widespread or systemic bullying or harassment, including misogyny or misogynoir at the charity”.

Nevertheless, it did acknowledge the “strong perception of ill-treatment felt by a number of parties to the dispute and the impact this may have had on them personally”.

It also found no evidence of “‘over-reach’ by either the chair or the Duke of Sussex as patron”.

‘Confusion exacerbated tensions’

But it was critical of the charity’s “lack of clarity in delegations to the chair which allowed for misunderstandings to occur”.

And it has “identified a lack of clarity around role descriptions and internal policies as the primary cause for weaknesses in the charity’s management”.

That “confusion exacerbated tensions, which culminated in a dispute and multiple resignations of trustees and both founding patrons”.

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Why was Prince Harry accused of ‘bullying’?

Harry: Report falls troublingly short

A spokesperson for Prince Harry said it was “unsurprising” that the commission had announced “no findings of wrongdoing in relation to Sentebale’s co-founder and former patron, Prince Harry, Duke of Sussex”.

They added: “Despite all that, their report falls troublingly short in many regards, primarily the fact that the consequences of the current chair’s actions will not be borne by her, but by the children who rely on Sentebale’s support.”

They said the prince will “now focus on finding new ways to continue supporting the children of Lesotho and Botswana”.

Dr Chandauka said: “I appreciate the Charity Commission for its conclusions which confirm the governance concerns I raised privately in February 2025.”

But she added: “The unexpected adverse media campaign that was launched by those who resigned on 24 March 2025 has caused incalculable damage and offers a glimpse of the unacceptable behaviours displayed in private.”

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Police investigating grooming gangs given AI tools to speed up cold case work

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Police investigating grooming gangs given AI tools to speed up cold case work

All police forces investigating grooming gangs in England and Wales will be given access to new AI tools to help speed up their investigations.

The artificial intelligence tools are already thought to have saved officers in 13 forces more than £20m and 16,000 hours of investigation time.

The apps can translate large amounts of text in foreign languages from mobile phones seized by police, and analyse a mass of digital data to find patterns and relationships between suspects.

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Grooming gang inquiry: ‘Our chance for justice’

‘We must punish perpetrators’

The rollout is part of a £426,000 boost for the Tackling Organised Exploitation (TOEX) programme, which supports officers to investigate complex cases involving modern slavery, county lines and child sex abuse.

The increased access to the AI technology follows Baroness Casey’s recommendation for a national operation to review cold grooming gang cases.

That operation will review more than 1,200 closed cases of child sexual exploitation.

“The sexual exploitation of children by grooming gangs is one of the most horrific crimes, and we must punish perpetrators, provide justice for victims and survivors, and protect today’s children from harm,” said safeguarding minister Jess Phillips.

“Baroness Casey flagged the need to upgrade police information systems to improve investigations and safeguard children at risk. Today we are investing in these critical tools.”

Read more from Sky News:
Harry criticises report into charity

Reeves told to find ‘substantial’ tax rises

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Key takeaways from the Casey review

Lack of ethnicity data ‘a major failing’

Police forces have also been instructed by the home secretary to collect ethnicity data, as recommended by Baroness Casey.

Her June report found the lack of data showing sex offenders’ ethnicity and nationality in grooming gangs was “a major failing over the last decade or more”.

She found that officials avoided the issue of ethnicity for fear of being called racist, but there were enough convictions of Asian men “to have warranted closer examination”.

The government has launched a national inquiry into the abuse and further details are expected to be announced in the coming weeks.

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Chancellor warned ‘substantial tax rises’ needed – as she faces ‘impossible trilemma’

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Chancellor warned 'substantial tax rises' needed - as she faces 'impossible trilemma'

Rachel Reeves will need to find more than £40bn of tax rises or spending cuts in the autumn budget to meet her fiscal rules, a leading research institute has warned.

The National Institute of Economic and Social Research (NIESR) said the government would miss its rule, which stipulates that day to day spending should be covered by tax receipts, by £41.2bn in the fiscal year 2029-30.

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In its latest UK economic outlook, NIESR said: “This shortfall significantly increases the pressure on the chancellor to introduce substantial tax rises in the upcoming autumn budget if she hopes to remain compliant with her fiscal rules.”

The deteriorating fiscal picture was blamed on poor economic growth, higher than expected borrowing and a reversal in welfare cuts that could have saved the government £6.25bn.

Together they have created an “impossible trilemma”, NIESR said, with the chancellor simultaneously bound to her fiscal rules, spending commitments, and manifesto pledges that oppose tax hikes.

Read more:
What is a wealth tax?

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Could the rich be taxed to fill black hole?

Reeves told to consider replacing council tax

The institute urged the government to build a larger fiscal buffer through moderate but sustained tax rises.

“This will help allay bond market fears about fiscal sustainability, which may in turn reduce borrowing costs,” it said.

“It will also help to reduce policy uncertainty, which can hit both business and consumer confidence.”

It said that money could be raised by reforms to council tax bands or, in a more radical approach, by replacing the whole council tax system with a land value tax.

To reduce spending pressures, NIESR called for a greater focus on reducing economic inactivity, which could bring down welfare spending.

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What’s the deal with wealth taxes?

Growth to remain sluggish

The report was released against the backdrop of poor growth, with the chancellor struggling to ignite the economy after two months of declining GDP.

The institute is forecasting modest economic growth of 1.3% in 2025 and 1.2% in 2026. That means Britain will rank mid-table among the G7 group of advanced economies.

‘Things are not looking good’

However, inflation is likely to remain persistent, with the consumer price index (CPI) likely to hit 3.5% in 2025 and around 3% by mid-2026. NIESR blamed sustained wage growth and higher government spending.

It said the Bank of England would cut interest rates twice this year and again at the beginning of next year, taking the rate from 4.25% to 3.5%.

Persistent inflation is also weighing on living standards: the poorest 10% of UK households saw their living standards fall by 1.3% in 2024-25 compared to the previous year, NIESR said. They are now 10% worse off than they were before the pandemic.

Professor Stephen Millard, deputy director for macroeconomics at NIESR, said the government faced tough choices ahead: “With growth at only 1.3% and inflation above target, things are not looking good for the chancellor, who will need to either raise taxes or reduce spending or both in the October budget.”

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