Overview

• Following the FCA’s consultation on a regulator-run redress scheme, Lloyds added £800m to its reserves, taking its total car finance provision to £1.95bn.
• Lloyds says the FCA’s redress methodology overstates losses and does not align with the Supreme Court’s Johnson ruling on case-by-case unfairness, and it will make representations to the regulator.
• The proposal covers motor finance agreements from 6 April 2007 to 1 November 2024, with up to 14.2 million agreements potentially eligible and a central redress estimate of about £8.2bn, or roughly £700 per customer on average.
• Operational plans include lenders prioritising existing complainants with automatic reviews after one month of no response, contacting others within six months of the scheme start, and allowing uncontacted borrowers a year to claim, with payments expected to begin in late 2026 subject to final rules.
• Consumers are urged to claim directly rather than use claims firms that can take sizable cuts—reported examples include fees of around 36%—as other lenders review provisions and industry bodies question the FCA’s loss estimates.