The Financial Conduct Authority (FCA) has confirmed it may consult on an industry-wide redress scheme for motor finance customers who were mis-sold car finance loans under discretionary commission arrangements (DCA).
The Supreme Court is set to hear an appeal on the matter at the beginning of April, with the FCA granted permission to intervene in the case. While the final Supreme Court ruling is still pending and in light of the FCA’s announcement, motorists may be unsure as to what happens next.
Coby Benson, Solicitor at Bott and Co outlines 3 potential scenarios:
1. The Supreme Court overturns the Court of Appeal ruling on Commission Disclosure complaints.
- A redress scheme will only be set up for DCA complaints.
- Pay-outs will be automatic, benefiting a large number of people although we think the pay-out amount will be lower.
- Estimated compensation could be billions.
2. The Supreme Court upholds the Court of Appeal ruling.
- The FCA would then create a redress scheme covering all car finance (about 99% of affected cases).
- This would be massive, potentially on the scale of PPI redress.
- Compensation could reach the £10s of billions, possibly prompting government intervention.
3. The Supreme Court rejects both Commission Disclosure complaints and casts doubt on DCA complaints.
- This could lead the FCA to reconsider whether DCA complaints deserve redress.
- In a worst-case scenario, no compensation would be paid out at all.
- However, this is considered highly unlikely.
In the meantime, Bott and Co encourage anyone who has yet to submit their claim, to do so by using our Mis-sold car finance claim checker which provides a risk-free way to check eligibility. Our legal experts are prepared to guide claimants through the process once the ruling is handed down.