The FCA has confirmed its support for lenders making voluntary settlement offers while legal challenges to the motor finance redress scheme continue. Barclays Partner Finance has announced it will make offers to some customers.
What does this mean?
-
Offers should be no less than the maximum compensation available to the individual customer under the current scheme.
-
Customers can accept an offer now or wait for the outcome of the legal challenges.
-
Acceptance is full and final. Customers keep the settlement even if the legal outcome would mean less compensation but cannot claim more if the scheme subsequently becomes more generous.
-
These settlement offers cannot be referred to the Financial Ombudsman Service for review.
-
Lenders must explain the consequences clearly and share the FCA’s customer factsheet.
The scheme remains partially suspended, with legal challenges scheduled to be heard between 16 February and 3 March 2027.
At ITC Compliance, we encourage dealers to ensure customer facing teams understand this update and can signpost customers appropriately.
Customers should deal directly with their lender regarding any settlement offer. Dealers should avoid interpreting individual offers or advising customers whether to accept or wait, directing them instead to their lender and the FCA’s published information.
Read the FCA update here.
