The Financial Conduct Authority has told motor-finance lenders they may make voluntary settlement offers while legal challenges to its compensation scheme continue, provided customers are offered no less than they would receive under the scheme.
The regulator’s expectations are aimed at offers described as full and final settlements. A lender must explain clearly that a customer who accepts will keep the payment even if the litigation later produces a lower scheme award, but will not be able to claim a higher amount if the eventual result would have increased compensation.
Customers may reject an offer and leave their complaint to be handled under the scheme. Because the choice is voluntary and the settlement would ordinarily withdraw the complaint, the offer itself cannot be referred to the Financial Ombudsman Service for review.
The FCA has produced a factsheet that lenders must give to customers with an offer. Firms are also expected to notify the regulator before making offers, and the FCA plans to publish a list so consumers can check whether an approach is genuine.
The motor-finance scheme is partly suspended while four legal challenges proceed. Hearings are listed between 16 February and 3 March 2027. During the suspension, firms must continue preparing for the scheme and progress complaints as far as possible, but need not calculate or pay compensation under the scheme itself.
The FCA said customers remain free to wait. Its minimum expectations for settlement offers were published on 3 November 2026.
