📅 3 November 2026 • FCA
What the FCA set. The regulator published minimum expectations for firms making early settlement offers on motor finance complaints. An offer must be no less than the customer would receive under the redress scheme. Anyone who accepts keeps the money even if the eventual legal outcome would have paid less, but cannot claim more later. An offer can be rejected and the claim left to the scheme, and a settlement offer itself cannot be referred to the Financial Ombudsman Service.
Oversight. Firms are expected to notify the FCA before making offers. The regulator will keep a regularly updated public list of lenders making offers, and every offer must come with a mandatory consumer factsheet. "Anyone who wants to wait can, and there's no obligation to agree to the offer," added Stephen Braviner Roman, FCA general counsel.
Why now. FCA research by Kantar found 89% of customers who complained or are considering complaining want the choice of a compensation offer now rather than waiting for legal challenges to conclude. 86% are comfortable deciding, 61% would accept an offer in line with the scheme, and 77% say sooner compensation would make a great deal or fair amount of difference to their finances. "Fair settlement offers could result in some people getting money sooner. And it's clear they want the choice," he said.
Scheme context. The redress scheme is sized around £9.1bn ($12.2bn) and payouts were due to start in 2026. It is partially suspended pending Upper Tribunal challenges, with a hearing from 16 February - 3 March 2027. Firms keep preparing and progressing complaints but need not calculate or pay scheme compensation until it concludes. Per Reuters, the FCA set minimum expectations and warned lenders against offers below its partly suspended scheme terms.
The scale. FCA estimates cover agreements from 6 April 2007 - 1 November 2024, with about 12.1 million eligible agreements (37%) and an average payout of around £830. Customers get at least one month to respond, complaining directly to the lender is free, and a law firm or claims company can cost up to 36% of compensation including VAT.
Barclays moves first. Barclays Partner Finance is making early full-and-final settlement offers to some customers owed compensation, those whose complaints were acknowledged on or before 1 October 2026. Offers are calculated with the FCA scheme methodology, acceptance is optional, and timing is aligned so accepted offers can be paid before the February hearing. Barclays has set aside £430m via Barclays Partner Finance and Lloyds £2bn (reported by City A.M.), with Lloyds saying it was disappointed but would not challenge the scheme.
Compliance action: Firms considering early offers should review the FCA expectations, notify the regulator in advance and attach the mandatory factsheet to every offer, keeping terms no less than scheme levels. Customers with a motor finance complaint can compare an early offer with waiting for the scheme, complain to the lender directly at no cost, and weigh advice before giving up the right to claim more later.
Sources: fca.org.uk, reuters.com, home.barclays.com, cityam.com, securities.io
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