FCA: Statement on motor finance review next steps

The UK’s Financial Conduct Authority (FCA) has announced that pending the Supreme Court hearing an appeal on 1 to 3 April against the Court of Appeal’s judgment regarding firms failing to comply with requirements relating to motor finance discretionary commission arrangements, it will confirm within 6 weeks of the Supreme Court's decision if it will propose a redress scheme and if so, how it will take it forward. 

The FCA notes that under a redress scheme, firms would be responsible for determining whether customers have lost out due to the firm’s failings. If they have, firms would need to offer appropriate compensation, with the FCA setting rules firms must follow and putting checks in place to make sure they do. 

The FCA also notes that a redress scheme would be simpler for consumers than bringing a complaint, and that it would expect fewer consumers to rely on a claims management company, meaning they would keep all of any compensation they receive. It would also be more orderly and efficient for firms than a complaint led approach, contributing to a well-functioning market in the future.