FCA considering redress scheme over Mis-sold Car Finance Scandal
Following the Supreme Court ruling on mis-sold motor finance claims, the Financial Conduct Authority (FCA) will announce the proposed redress scheme by October with an intention to compensate people in 2026.
This is a key step in ensuring that consumers receive fair treatment and redress where appropriate. The proposed scheme, if implemented, will set a structured framework for lenders to assess complaints and pay compensation where necessary.
It will propose rules on how lenders should consistently, efficiently and fairly decide whether someone is owed compensation and how much. It will monitor if lenders are following the rules and act if they’re not.
Estimated Cost
Under the scheme, consumers who were affected by discretionary commission arrangements may be eligible for compensation
FCA chief executive Nikhil Rathi has indicated that a figure of 50% commission level as a percentage of the total cost of finance would be classed as similar to that of Mr Johnson.
It is estimated the cost of any redress scheme, including compensation and administrative costs, to be no lower than £9bn, adding that a total cost of £18bn is “more plausible”.
Next Steps for Clients
Our specialist mis-sold motor finance legal team will engage with and review the FCA’s consultation, which we expect to be published by early October.
Please know that we are actively progressing your claim to achieve the best outcome possible. There is nothing further for Bott and Co clients to do at this point in time.
As more information becomes available, we will continue to write to all of our mis-sold motor finance clients to explain exactly how claims are impacted and what the clear next steps are.