FCA Motor Finance Customer Compensation Scheme Consultation - Why a Consultaion

Financial Conduct Authority's (FCA) intention to consult on a compensation scheme for motor finance customers who were subject to unfair practices. This initiative stems from a detailed review and a Supreme Court ruling that identified instances where lenders acted unlawfully due to undisclosed commission payments to car dealers. The FCA aims to establish an industry-wide scheme to ensure fair, consistent, and efficient compensation for consumers, potentially covering agreements dating back to 2007. The consultation will address crucial aspects like the scope of the scheme, redress calculation methodology, and interest payments, aiming for a launch in 2026. The FCA also advises both firms to assess potential liabilities and consumers to complain directly without necessarily involving claims management companies.