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The Financial Conduct Authority (FCA) has confirmed its final redress scheme for motor finance customers, setting out the approach firms will need to follow to compensate those who were treated unfairly.
The scope of the scheme was outlined for the consultation period; this final structure details the eligibility criteria and core timings for firms to work to. Personal Contract Hire agreements are not under the scope of the scheme.
The FCA has made several changes to the structure of the scheme following feedback, including adjustments to eligibility thresholds and how compensation will be calculated. Around 12.1 million agreements are now expected to fall within scope, with total redress estimated at £7.5 billion. The regulator has also introduced measures to streamline delivery, with firms only required to contact customers who are due compensation or who may be affected.
Timelines for implementation have been confirmed, with firms expected to begin compensating customers from 2026 and the majority of payments expected to be completed by the end of 2027.
The BVRLA held a short webinar for members on Tuesday 31 March. There, senior members of the team shared headline updates from the announcement and highlighted areas that are likely to be of particular interest to members.
BVRLA members can watch the webinar online now (log-in is required).
Members are encouraged to review the FCA’s announcement and policy paper, familiarise themselves with the requirements of the scheme, and seek external advice where necessary. The BVRLA will continue to engage with members and stakeholders to understand the impact of the scheme and support ongoing industry discussions.
Access the FCA's announcement and corresponding policy paper.
Accessing member-only content on BVRLA.co.uk: Help Centre.
