The Supreme Court’s judgment on April’s motor finance appeal is expected in the coming weeks, and the Financial Conduct Authority (FCA) has now set out its key considerations for a potential redress scheme in response.
While much of the information has been shared previously, the update from the FCA provides valuable insights into the authority’s current priorities and potential next steps.
Key points include:
- Swift action post-judgment – the FCA is aiming to move quickly once the Court’s decision is announced.
- Consumer-friendly approach – any scheme will be designed to be accessible and easy to navigate without the need for Claims Management Companies (CMCs) or legal representation.
- Redress calculations – the FCA may adopt a different method to those speculated by CMCs and law firms, whose estimates are largely based on previous Financial Ombudsman Scheme (FOS) decisions.
- Market impact awareness – the FCA acknowledges that extensive redress liabilities could force some firms to exit the market, potentially reducing competition and increasing future car finance costs for consumers.
The update also notes that the consultation period was shortened due to significant pre-consultation engagement, an area where the BVRLA actively represented its members' interests.
Of particular importance is the FCA’s indication that any redress scheme could be “comprehensive and wide-reaching” - a factor that may delay payments to affected consumers.
The BVRLA team continues to closely monitor developments and remains fully prepared to support members with timely guidance and updates as soon as the Court delivers its decision.
More information on the FCA website: Key considerations in implementing a possible motor finance consumer redress scheme.
See the BVRLA’s Commission Disclosure hub or email [email protected] with any questions.
