UK FCA examples of good and poor practice from review of motor finance redress scheme implementation plans

The UK Financial Conduct Authority (FCA) has published a new webpage with examples of good and poor practice identified from its review of motor finance firms' implementation plans for the motor finance redress scheme. After the scheme rules were published, the FCA asked in-scope firms to submit implementation plans, explaining how they would deliver fair, consistent and timely outcomes for consumers. Overall, most firms demonstrated a good understanding of the scheme's requirements, but many plans remained high level without sufficient detail on delivery. The FCA assessed firms' plans against key areas including operational readiness, population identification, group-based decision making, redress calculation and payment, quality assurance and oversight, and multiple representative issues.

The FCA identified several recurring weaknesses across firms' plans, including:

• Plans that repeated scheme requirements without explaining how the firm would deliver them.
• Limited detail on systems, workflows, staffing models or procedures needed to process cases at scale.
• Population figures provided without explanation of methodology, assumptions or validation.
• References to calculators without explaining how they work or how they have been validated.
• Governance structures described without clear quality assurance arrangements.
• Limited processes for identifying duplicate or unclear representation.

The FCA expects all firms to review these examples and make any necessary changes to their own plans, controls and oversight arrangements, and to keep named motor finance supervisors updated on material developments. The FCA stated that it will continue to engage with firms where concerns remain, and that some firms may receive individual feedback or be asked to provide further detail where their plans do not demonstrate sufficient readiness.

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