Drivers are set to receive a major update on the car finance scandal within the coming days, as millions of motorists could be owed compensation.
The car finance scandal redress scheme follows drivers being overcharged for their policies, so lenders could gain a larger commission.
The Financial Conduct Authority has confirmed that it will set out its approach to the motor finance redress scheme after the markets close on Monday, March 30.
It is being done after the markets close to avoid any significant impacts on the financial sector, regardless of the outcome of the scheme.
This follows a consultation run by the regulator in October last year, which aimed to hear from the industry about how the compensation scheme should be introduced.
Estimates suggest that drivers will probably receive less than £950 in compensation, although the total cost is expected to be around £9billion.
Under certain circumstances, including if 100 per cent of affected drivers sign up to the scheme, it could total more than £18billion.
The first compensation payments are expected to be delivered this year, with the FCA potentially releasing more information on when drivers can expect redress next week.
The FCA will unveil new car finance compensation scheme updates next week
|GETTY
Some lenders have already set aside hundreds of millions of pounds in preparation for the compensation they will be expected to pay out in the coming months.
Close Brothers Motor Finance has set aside £300million, although a short-seller warned that the actual total could be four times higher.
The firm announced that it would also be cutting 600 jobs from its organisation in a bid to reduce costs by £25million in the year to the end of September.
Following the warning from short-seller Viceroy Research, shares in Close Brothers fell 14 per cent.
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Close Brothers recently announced plans to cut 600 staff from its workforce
| PASpeaking to the Mail on Sunday, Mike Morgan, CEO of Close Brothers, said: "I would contend you knew what you were paying for this car and you got the car.
"The way it's structured at the moment doesn't reflect the loss that customers have suffered and is disproportionate."
The lender strongly rejected the claims from Viceroy Research that it would have to pay more for the compensation scheme.
The Financial Conduct Authority will confirm new updates after 4.30pm on Monday, March 30.