Santander and Close Brothers have joined the ranks of major lenders accepting the £9.1 billion car-finance plan proposed by the Financial Conduct Authority (FCA). This significant development comes after months of negotiations to address widespread mis-selling practices in the UK’s car finance market, affecting 12.1 million agreements and potentially providing an FCA-estimated scheme average of £829 per eligible agreement per agreement.
What Does This Mean for UK Drivers?
The acceptance of the plan by Santander and Close Brothers means that more drivers who were part of mis-sold car finance agreements may soon have a pathway to receive compensation without needing to engage with claims management companies. The move follows similar commitments from other major lenders, bringing closer the day when millions of affected motorists can seek redress directly through their lenders or via the Financial Ombudsman Service.
Drivers who believe they were mis-sold car finance should first check if their lender has confirmed participation in the FCA plan and understand what stage it is at. For instance, while Close Brothers has agreed to participate, it may still be some time before drivers can begin claiming compensation directly from them. This timeline uncertainty highlights the importance of staying informed about specific lenders' progress.
It is crucial to note that the total amount of £9.1 billion covers a period from April 2007 to November 2024, indicating that many agreements made during this timeframe could have been affected by unfair practices such as excessive commission arrangements or mis-selling of optional add-ons like GAP insurance and warranty products.
What Should Motorists Do Now?
Given the ongoing nature of these developments, motorists are advised to:
- Check Your Lender's Status: Visit MLJ’s lenders page for an up-to-date list of lenders that have committed to participating in the FCA plan and their current status.
- Direct Communication with Your Lender: If your lender is confirmed as part of the plan, you do not need a claims management company; instead, complain directly to your lender for free at any time during this process.
- Monitor Official Announcements: Regularly check the FCA’s official announcements and updates regarding the implementation timeline for each participating lender.
- Utilise MLJ Resources: To stay informed about car finance compensation and other related issues affecting motorists, refer to MLJ's guides on PCP and HP.
By following these steps, UK motorists can ensure they are well-informed and prepared to seek the compensation they may be entitled to without incurring unnecessary costs or delays.