Redress is compensation or a remedy given to consumers who were sold financial products unfairly. In the context of UK motorists, this often involves situations where someone was pressured into taking out an expensive car finance deal they didn’t really need.
For example, imagine you bought a new car and were told that without purchasing additional insurance and extended warranties, your loan would be much higher interest. If it turns out those extras weren't necessary for securing the loan on fair terms, you might have grounds to seek redress through the Financial Ombudsman Service (FOS).
Redress matters because it helps ensure fairness in financial dealings and protects consumers from misleading practices. In the UK, this is governed by various regulations such as the Consumer Rights Act 2015 and the Conduct of Authorised Persons sourcebook (COBS) which sets out rules for how financial services should be sold.
A practical tip: If you think you’ve been treated unfairly when buying a car or financing one, don’t hesitate to contact your bank or finance company directly first. They might offer a resolution without needing to escalate the issue further. If not, consider reaching out to the Financial Ombudsman Service for guidance on how to proceed with seeking redress.
How This Relates to the FCA Redress Scheme
The FCA motor finance redress scheme covers 12.1 million agreements with an average compensation of £829 per agreement. The total cost to firms is £9.1 billion. If you had PCP or HP finance between 6 April 2007 and 1 November 2024, you may be eligible. The final deadline to complain is 31 August 2027. You do not need a claims management company.