S&U PLC (LSE:SUS), the specialist motor and property financier, says the Financial Conduct Authority’s (FCA) updated motor finance commission redress scheme will cut the number of its eligible customers by half.
The FCA this week published details of its redress scheme covering discretionary commission arrangements (DCAs), under which lenders paid brokers higher commissions in exchange for charging customers higher interest rates.
Karl Werner, chief executive of Advantage Finance, S&U’s motor finance subsidiary, said Advantage had never offered DCA commissions or engaged in tied arrangements, and that its commission levels fell within the FCA’s proposed redress thresholds except on very small loans.
He added that nearly 98% of Advantage customers had already been found ineligible before the final rules were published.
Werner said the company’s existing provisions would prove “more than adequate” to cover the costs of the scheme, and that redress would not affect its growth plans.
S&U also welcomed simplification of the customer contact process and the FCA’s proposal that claims can be rebutted where no better deal was available to the customer.
Werner said he expected the matter to be concluded by early autumn.