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Following findings that indicate almost 9 out of 10 (89%) motor finance customers who have raised a complaint or are considering doing so would prefer the option of accepting an offer of compensation now, rather than waiting for the legal challenges to the FCA’s compensation scheme to conclude.
The FCA has reiterated that it supports lenders making settlement offers, so long as they amount to no less than a customer would receive through the scheme.
If Lenders do make settlement offers, they are expected to be clear with people about what acceptance will mean including that they will keep any money received, even if the outcome of the legal challenges means they would have received less (but also conversely that they will not be able to claim more later if the outcome of the legal challenge means they would have been paid more). As consumers can reject an offer and leave their claim to be dealt with under the scheme, these offers can’t be referred to the FOS for review.
The FCA has published a factsheet that lenders must share with customers when making settlement offers. Not all lenders are likely to make offers, and those that do may only make them to some customers owed compensation. The FCA will regularly update its website with lenders making settlement offers to help consumers check whether an offer is genuine. Firms are expected to notify the FCA if they plan to make offers.
About the author(s)
Duncan is a Principal Associate in the Funds and Financial Services team specialising in financial services regulation.
Duncan advises clients across a wide range of sectors including banking, consumer finance, payment services, insurance, asset management and pensions with a particular focus on retail banking, regulated credit and payment services.