On Wednesday 7th October, the Financial Conduct Authority (FCA) announced plans for a redress scheme to compensate consumers affected by unfair motor finance agreements.
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It was detailed that around 14 million agreements could be eligible with an extended time frame of 6 April 2007 and 1 November 2024. The FCA have stated average payments of about ÂŁ700 per agreement, with successful claims qualifying for one of the following circumstances:
1. A discretionary commission arrangement (DCA), which allowed the broker to adjust the interest rate the customer would pay to obtain a higher commission.
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2. A high commission arrangement (35% of the total cost of credit and 10% of the loan).
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3. A contractual arrangement or tie between the lender and broker, which provided exclusive or near exclusive rights to lenders to provide credit. 
If youâve seen earlier estimates stating you could be owed compensation less than ÂŁ950, please note that these were based on pre-judgement references and recent updates mean compensation may average at a lower value. However, if youâve had more than one eligible finance agreement, you could still have multiple valid claims.
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The FCA is currently consulting on the proposal before finalising details.
For more information, see:
⢠FCA consults on motor finance compensation scheme | FCA
⢠14m unfair motor loans due compensation under FCA-proposed scheme | FCA
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Reclaim My Money Limited is an authorised Claims Management Company.
By making a claim with our company it does not resolve your complaint quicker or with a better outcome than if you claimed yourself. You are not required to use our services to pursue your claim. You can make a claim yourself via the lender or the Financial Ombudsman Service/ Financial Services Compensation Scheme.
Lenders have until 4th December 25 to respond to your complaint, as the FCA are consulting on a potential motor finance redress scheme.

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