Bite-size: Motor finance redress scheme – FCA looks at implementation period and process changes
This morning the FCA issued an update on its proposed industry-wide motor finance redress scheme. Final decisions have not yet been made but several changes are under consideration following more than 1,000 consultation responses.
If the scheme goes ahead, the FCA now expects to publish the final rules towards the end of March, with the announcement made outside market hours and the date confirmed in advance.
There is likely to be an implementation period to give firms time to prepare: three months for most agreements, with up to five months for older agreements, reflecting the scale and operational complexity of the scheme.
The FCA is also proposing a simplified consumer journey and reduced administrative burden for firms. Under the updated approach:
Consumers who have already complained before the scheme starts would not be asked to opt out.
Instead, within three months of the implementation period ending, lenders would inform them whether compensation is due and how much.
Consumers could accept redress immediately, rather than waiting for a final determination.
Firms would no longer need to send letters by recorded delivery, with a broader range of communication channels permitted, subject to safeguards against fraud.
Full details here: https://www.fca.org.uk/news/statements/motor-finance-compensation-scheme-include-implementation-period
If you would like to discuss what these changes may mean for your firm, the Auxillias team would be happy to help. Please get in touch with jo.davis@auxillias.com or daksha.mistry@auxillias.com
