FCA clarifies requirements for firms offering motor finance redress settlements
FCA sets expectations for firms making car finance settlement offers
AI-assisted source summary · not independently verified. Content standards
FCA clarified that, while legal challenges are ongoing, lenders may offer settlements to customers eligible for motor finance redress, but the amount must not be below the redress scheme’s standard. Firms must explain the consequences of accepting an offer and provide customers with an explanatory document published by FCA; customers can reject the offer and continue to have their claim handled through the redress scheme. A survey found that 89% of relevant customers want the option to accept a redress offer now, and 61% said they would accept an offer that meets the scheme’s standard.
The material explains the conditions for offering motor finance redress settlements early while legal challenges are ongoing, as well as the consequence that customers cannot claim any shortfall later based on the outcome of the litigation after accepting an offer.
Source:FCA (UK) · fca.org.uk