FCA sets expectations for firms making car finance settlement offers

New survey evidence suggests most affected customers value early choice and would consider an offer aligned with the compensation scheme, increasing pressure on lenders to decide whether proactive settlement is appropriate. For compliance teams, this is a conduct-risk and governance issue rather than a simple customer-service exercise: offers must be explainable, documented, and no worse than the scheme, with clear disclosure of trade-offs and no pressure on complainants. Firms should assess their exposure, align settlement design with FCA expectations and scheme parameters, brief boards and complaints teams, and maintain robust records.

Early offers could reduce complaint backlogs and provisioning uncertainty, but poorly designed offers may create further conduct, reputational, and litigation risk. Monitor legal developments and be ready to adjust approach quickly.