FCA’s Motor Finance Redress Scheme

“It’s encouraging to see the FCA standing its ground and pushing ahead with a redress scheme that will benefit millions of consumers. Lenders have been lobbying hard to get the compensation bill down and, while the FCA has made some minor amendments in favour of the industry, most of the original proposal remains in place. Consumers now stand to receive up to £9.1bn in compensation - refunding them hundreds of pounds in interest and commission that they were overcharged. 

“It’s likely that lenders will continue to challenge whether the FCA has the right to include agreements taken out before 2014 within its redress scheme. The FCA only took over responsibility for the sector from the Office of Fair Trading in 2014 and while it believes it has the powers to force lenders to pay compensation for sales that happened before this period, the industry will almost certainly challenge that view in the courts. So those with more historic claims may have to wait a little longer to get their money back.  

“Nevertheless, any consumers who bought cars on finance between 2007 and 2024 should make sure they get their complaints in as soon as possible. There’s no need to use a claims management company. It’s free and easy to make a complaint yourself and there’s helpful template letters on sites like MoneySavingExpert.”