Close Brothers Group’s share prices surged after the company announced its ability to absorb a £320 million bill for car finance redress payments without any significant impact on profitability. The move comes amid ongoing scrutiny by the Financial Conduct Authority (FCA) into the motor finance industry, which affects 12.1 million agreements and could result in a total of £7.5 billion in compensation to customers.
The UK’s financial regulator, the FCA, has been investigating practices across car finance products such as personal contract purchase (PCP), hire purchase (HP), and balloon payment schemes since April 2007. The investigation covers agreements made up until November 1, 2024, with an average redress payment of £829 per agreement.
What Does This Mean for UK Drivers?
For UK drivers who have been affected by the FCA motor finance review and are covered by the FCA redress scheme., this news is reassuring. Close Brothers, one of the largest providers in the market, has confirmed its capacity to absorb significant costs without compromising on customer service or financial health. This indicates that other major lenders may also be prepared to handle their respective redress payments efficiently.
Close Brothers estimates that approximately 20% of affected customers will seek compensation, equating to around £320 million in total payouts. The company’s statement suggests that the payment plan is well within its operational capacity and should not affect service delivery or customer satisfaction levels.
UK motorists who have grievances about their car finance agreements should consider contacting their lender directly for free. Many lenders offer straightforward processes for redress claims, allowing customers to resolve disputes efficiently without needing a third-party intermediary. This approach can save time and ensure that the process remains transparent and fair.
When Can Motorists Expect Their Compensation?
While Close Brothers has confirmed its ability to absorb the costs associated with redress payments, the timeline for receiving compensation is crucial. The FCA’s review framework was finalised in 2019, but the implementation of specific payment schemes began only recently. Given that the investigation period extends up until November 1, 2024, many motorists will have to wait until these agreements are fully processed.
The FCA has provided a clear timeline for compensation payments, with affected customers expected to receive their redress by June 30, 2025, in most cases. However, some claims may take longer due to the complexity of individual agreements and the need for thorough review processes.
What Should Motorists Do Now?
Motorists who believe they are covered by the FCA redress scheme. should not delay contacting their lender directly for free. Close Brothers and other major providers offer full guidance on how to proceed with redress claims, ensuring that customers can deal with the process efficiently without incurring additional costs or delays.
It is important for motorists to gather all relevant documentation related to their car finance agreement before reaching out to their lender. This includes any correspondence regarding the terms of their loan, as well as any complaints or disputes they have raised previously. By providing clear and accurate information, customers can expedite the process and increase their chances of receiving fair compensation.
motorists are encouraged to visit MLJ.org.uk (mlj.org.uk) for detailed guides on car finance claims, including specific advice on PCP and HP agreements. Our full resources provide practical tips and legal insights that can help you deal with this complex situation with confidence.
In summary, while the process of receiving compensation may take time, it is reassuring to know that major lenders like Close Brothers are prepared to handle their redress payments responsibly. By following established procedures and seeking direct assistance from your lender, UK motorists can ensure a smoother path towards obtaining fair compensation for any grievances they may have with their car finance agreements.
For more information on the FCA motor finance review and specific guidance on claims, visit our dedicated guides at MLJ.org.uk.