We are considering over 1,000 responses to our proposals for a
compensation scheme for motor finance customers who were treated
unfairly.
If we proceed with a scheme, we are likely to make several
changes. If we do go ahead, we expect to publish final rules in
late March. The timing of publication will be outside market
hours and we will confirm the date in advance.
Final decisions on the scheme have not yet been made. But to help
firms prepare and ensure consumers get any money owed promptly,
we are setting out some details now on how we intend to
streamline the consumer journey and make it smoother for firms to
operate.
Given the scale and complexity of the scheme and in response to
feedback, we are likely to introduce an implementation period of
3 months, with up to 5 months for older agreements. Firms could
choose to process claims under the scheme sooner.
We would also streamline the process for consumers and firms.
- People who complain before the scheme starts would no longer
be asked if they wish to opt out. Instead, within 3 months of the
end of the implementation period, their lender would tell them
whether they are owed compensation, and how much.
- Consumers receiving a redress offer would be able to accept
it immediately, rather than waiting for a final determination.
- Firms would not be required to write to customers via
recorded delivery. We would allow a range of channels that best
meet consumers' needs with appropriate safeguards to prevent
fraud.
Even with an implementation period, streamlining the process
means millions of people would receive compensation in 2026.
Our advice remains that anyone concerned they weren't told about
commission involved in their motor finance deal should complain now. Doing so means
they should get any compensation sooner. There is no need to use
a claims management company (CMC) or law firm, and those who do
may lose over 30% of any compensation. We have cracked down on
poor practice by FCA-regulated CMCs. Over 800 misleading adverts
have been removed or amended since January 2024 and we have
intervened with 5 CMCs causing harm: 2 reduced exit fees and 4
agreed to stop taking on new clients until they can show they
comply with our rules.
The likely changes to the scheme were supported by many consumer
groups and firms that responded to our consultation. As well as
providing a better experience for consumers, the changes would
help keep the cost of delivering the scheme proportionate,
supporting a well-functioning market for the millions of people
that rely on it.
