Motor finance claims: could lenders see an increase?

Abby Mercer, Solicitor

Lenders should brace themselves for potential uptick in claims following the FCA’s campaign to promote their redress scheme for motor finance consumers

The Financial Conduct Authority has launched a campaign with the sole purpose of promoting their scheme for redress and telling motor finance customers that they do not need to use law firms or claims management companies to claim compensation.

Following the Supreme Court’s much awaited and much publicised rulings on car finance, research conducted by the FCA shows 79% of motor finance customers are aware that they may be owed compensation, but 41% did not know they would not need to use a claims management company or law firm, if the FCA’s planned redress scheme goes ahead.

Lenders and finance providers should brace themselves for an increased awareness among consumers that compensation is due to them, as the FCA promote their scheme through social media and radio adverts. The campaign is also likely to increase the number of consumers willing to seek compensation, following the news that they do not need to pay legal fees from any potential payment upon a successful claim, should they use the FCA’s redress scheme. In light of this, lenders will need to consider whether they should allocate additional resources to deal with any temporary increase in claims and the work that will come with processing those claims.

If you are a lender and require any assistance in reviewing your current lending terms based on the motor-finance judgment, or if you require any advice on how to prepare for, and process, any potential compensation claims, please do not hesitate to get in touch with the dispute resolution team here at Kuits by telephoning 0161 832 3434.