The Financial Conduct Authority set out “minimum expectations” for redress offers as Barclays became the first UK bank to announce “full and fair” settlement offers to a pool of customers
International News via Reuters:
Britain’s financial watchdog on Tuesday warned motor finance lenders against offering motorists compensation for mis-sold car finance that did not meet the terms of its partly-suspended £9.1 billion ($12.2 billion) compensation scheme.
The Financial Conduct Authority set out “minimum expectations” for redress offers as Barclays became the first UK bank to announce “full and fair” settlement offers to a pool of customers, hoping to start drawing a line under what has been dubbed one of Britain’s costliest financial mis-selling scandals.
“Early settlement offers will be calculated using the FCA’s motor finance redress scheme methodology, reflecting the individual circumstances of each loan agreement,” the bank said.
Some Barclays Partner Finance customers, whose complaints about motor finance commissions had been acknowledged on or before October 1, 2026, would be contacted in the coming weeks and would receive clear information about how their offer had been calculated and what acceptance would mean, Barclays said.
The 17-year mis-selling scandal has weighed on an industry that includes Lloyds, Close Brothers and the finance arms of vehicle manufacturers.
The FCA, whose planned redress scheme has been partly suspended ahead of legal challenges expected to be heard next February, said in June that car finance companies in Britain were discussing drawing a line under the scandal by offering to settle some liabilities early.
But the watchdog emphasised on Tuesday that lenders should be able to demonstrate that any voluntary compensation offers reflected at least the maximum redress that would have been available under its scheme.
($1 = 0.7460 pounds)
Reporting by Kirstin Ridley, Editing by Louise Heavens and Tommy Reggiori Wilkes
