FCA Announce Motor Finance Redress Scheme
The Financial Conduct Authority (FCA) have today, 30 March, published the rules for their multi-billion pound redress scheme for consumers affected by mis-sold motor finance. Today’s announcement marks a significant step forward for millions of motorists who may have been charged more for their car finance than they should have been.
The FCA have said consumers that are eligible for compensation will receive an average of around £829 per agreement. They have set rules for how car finance lenders assess claims and calculate any compensation. The FCA have also said they will be supervising lenders to make sure they follow them.
FCA Redress Scheme Timelines
- Within 3 months, your lender must let you know if you’re due compensation and the amount.
- Agreements from 6 April 2007 – 31 March 2014: complaints submitted before 31 August 2026 should receive a response by 30 November 2026.
- Agreements from 1 April 2014 – 1 November 2024: complaints submitted before 30 June 2026 should receive a response by 30 September 2026.
We welcome today’s announcement of the final redress scheme rules, which provide long-awaited clarity for consumers who were mis-sold motor finance. However, while the scheme recognises widespread failings and sets out a path to redress, many consumers may still fall short of receiving what they are fully owed.
Coby Benson continues: ”The burden on individuals to navigate complex claims alone, particularly where lenders may challenge eligibility or limit payouts, makes independent legal representation more important than ever.”
Who Could Be Eligible For Compensation?
Motor finance firms and lenders breached the law and Financial Conduct Authority rules by failing to properly disclose the commission paid by lenders to car dealers for arranging finance, according to the regulator.
The FCA estimates that around 12 million motor finance agreements may have been mis-sold. Under the proposed redress scheme, you could be entitled to compensation if:
- You took out motor finance for a car, van, motorbike or campervan (excluding caravans); and
- The agreement was active between 6 April 2007 and 1 November 2024; and
- The finance was arranged as a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement (leased vehicles are not included); and
- The vehicle was primarily for personal use or for business use as a sole trader or small partnership, where the finance amount was under £25,000.
If you meet these criteria, it’s worth checking whether you could make a mis-sold motor finance claim.
Bott and Co Motor Finance Clients
At Bott and Co Solicitors, we have been helping thousands of clients pursue mis-sold motor finance claims.
Our specialist legal team is now digesting the details of the FCA’s redress scheme and we will be contacting clients in due course with a full update.