Overview

• Close Brothers increased its motor finance provision by about £135 million to roughly £300 million, saying the FCA’s proposed redress method is not proportionate and does not reflect actual customer loss.
• Lloyds raised its provision by £800 million to £1.95 billion and warned the formula could overcompensate some borrowers, while signaling the outcome may change through representations or legal proceedings.
• The FCA’s proposed scheme covers agreements from 2007 to 2024, identifies eligibility using a 35% threshold, and estimates about 14.2 million deals would qualify with average payouts near £700, for an industry cost of around £11 billion.
• The Finance and Leasing Association said the proposal is so broad it would pay customers who suffered no loss, and The Times reported BMW is seeking a meeting with Chancellor Rachel Reeves over potential exposure.
• FCA chief Nikhil Rathi defended the regulator-run process, saying it offers the best route to resolve the issue for consumers and firms because alternatives would be more costly and slower.