Leading UK banks Close Brothers and Santander have announced they will not challenge the Financial Conduct Authority’s (FCA) extensive £9.1 billion ($12.31 billion) compensation scheme concerning mis-sold car finance. This decision aligns them with other major institutions such as Barclays and Lloyds Banking Group, both of whom have also indicated their acceptance of the regulator’s redress programme. The widespread compliance from these financial powerhouses signals a significant step towards resolving a long-standing issue for affected consumers.
The FCA had previously directed the country’s motor finance industry to compensate motorists who were impacted by inadequately disclosed commissions and contractual ties between lenders and car dealerships. These problematic practices occurred over an extended 17-year period, concluding in 2024. Close Brothers, a UK merchant bank providing lending and wealth management, and Santander, the Spanish multinational financial services company, are among the key players grappling with the implications of this extensive redress scheme, which has seen billions already set aside by the industry for potential payouts.
A spokesperson for Close Brothers articulated the company’s stance, stating, “Close Brothers does not intend to challenge the FCA’s motor finance redress scheme. While there are elements of the scheme that we disagree with, after careful consideration we believe that the existing scheme offers a quick, clear and certain route to resolving this matter for all relevant parties.” Concurrently, a Santander spokesperson affirmed their position, saying, “We have decided not to challenge the schemes and will now focus on their implementation. We will continue to work constructively with regulators and policymakers to seek to improve the competitiveness of the UK in the interests of all our customers, taxpayers and investors.” These statements underscore a collective industry pivot towards implementation rather than further legal dispute.
