RE: Likely CBG compensation3 Aug 2025 16:43
Press Release from FCA today below. I'm not a lawyer although I have spent large periods of my working life looking in detail at complex documents and contracts. My view is that this release is full of 'ifs buts and maybe's' dressed up to look like fact. They might drag it out and cause all bank shareholders a lot of pain but I think this is a big face saving quote from Nikhil Rathi that he had to make otherwise the FCA becomes totally irrelevant. I think this will get pulled apart by real legal minds and could come back to haunt the FCA even more. The devil is in the detail.... "'It is clear that some firms have broken the law and our rules. It’s fair for their customers to be compensated. We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal.
'Our aim is a compensation scheme that’s fair and easy to participate in, so there’s no need to use a claims management company or law firm. If you do, it will cost you a significant chunk of any money you get.
'It will take time to establish a scheme but we hope to start getting people any money they are owed next year.'
The announcement follows Friday’s landmark ruling by the Supreme Court, on cases in which the FCA had intervened. While some motor finance customers won’t get compensation because in many cases commission payments were legal, the Court ruled that in certain circumstances the failure to properly disclose commission arrangements could be unfair and therefore unlawful.
The FCA will propose rules on how lenders should consistently, efficiently and fairly decide whether someone is owed compensation and how much. It will monitor if firms are following the rules and act if they’re not.
The FCA currently estimates that most individuals will probably receive less than £950 in compensation.
The final total cost of any compensation scheme will depend on the final design. That makes it hard to estimate precisely. Any estimates are only indicative at this stage and may change. The FCA thinks it unlikely the cost of the scheme, including to run it, would be much lower than £9 billion. And it could be higher, up to £18 billion in some scenarios though the FCA doesn’t believe these are the most likely. A total cost midway in the range, as forecast by some analysts, is more plausible.
The consultation will launch by early October. If the compensation scheme goes ahead, the first payments should be made in 2026.
People who have already complained don’t need to do anything. Consumers who are concerned that they were not told about commission and think they may have paid too much for their motor finance lender should complain now. Consumers do not need to use a claims management company or law firm and doing so could cost them around 30% of any compensation paid.
The FCA recognises that consumers want to receive any compensation owed quickly and firms and investors want certainty. Th
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