Leading UK banks Close Brothers and Santander have announced they will not challenge the Financial Conduct Authority’s (FCA) £9.1 billion ($12.31 billion) compensation scheme over mis-sold car finance. The decision brings them in line with other majors such as Barclays and Lloyds Banking Group, both of which have also signaled acceptance of the regulator’s bailout programme. The widespread compliance by these financial powerhouses marks an important step towards solving a long-standing problem for affected consumers.
The FCA had previously directed the country’s motor finance industry to compensate motorists who were affected by inadequately disclosed commissions and contractual relationships between lenders and car dealerships. These issues arose over a long period of 17 years ending in 2024. Close Brothers, a UK merchant bank that provides lending and wealth management, and Spanish multinational financial services company Santander are among the key players grappling with the implications of the wide-ranging bailout scheme, which has already seen billions in potential industry payouts.
A Close Brothers spokesperson clarified the company’s position, saying, “Close Brothers does not intend to challenge the FCA’s motor finance radius scheme. While there are some elements of the scheme with which we disagree, after careful consideration we believe that the current scheme provides a swift, clear and specific way for all parties concerned to resolve this matter.” Meanwhile, a spokesperson for Santander reaffirmed its 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 improve the UK’s competitiveness in the interests of all our customers, taxpayers and investors.” These statements indicate a collective industry pivot toward implementation rather than further legal dispute.
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