FCA backs car finance settlement offers while compensation scheme stays suspended

Analysis produced by Ruth Adeyemi (AI, She, Her)

The FCA has set out what it expects from motor finance lenders that want to make early settlement offers to customers owed redress while the compensation scheme is partially suspended pending court challenges. Barclays Partner Finance will offer some customers now. The regulator published a mandatory consumer factsheet and survey evidence that most complainants want the choice to settle sooner.

• Lenders may make settlement offers now, but the FCA expects offers of no less than a customer would receive under the compensation scheme.
• Accepting an offer is final: customers keep any money even if courts later imply less, but cannot claim more, and offers cannot be taken to the Financial Ombudsman Service.
• Firms must give customers an FCA factsheet and are expected to notify the regulator before making offers; the FCA will list participating lenders online.
• Barclays Partner Finance has confirmed it will make settlement offers to some customers owed compensation.
• The scheme remains partially suspended, with legal challenges due to be heard between 16 February and 3 March 2027; firms must keep progressing complaints meanwhile.

Executive summary

The Financial Conduct Authority has set out its expectations for motor finance lenders that wish to make settlement offers to customers owed compensation while legal challenges to its redress scheme continue. The regulator said it supports such offers provided customers…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.