Carmoola responds to FCA’s final motor finance redress scheme: focus now turns to delivery for drivers

Carmoola, the digital car finance lender, has responded to the Financial Conduct Authority’s publication of its final motor finance redress scheme, which sets out how firms must identify unfair relationships and calculate compensation for affected customers.

The FCA estimates around 12.1 million agreements are in scope, with total redress of around £7.5bn if most eligible consumers claim, and average compensation of approximately £830 per agreement.
With the framework now confirmed, attention turns to how effectively the scheme will work in practice and how quickly customers receive compensation.

Aidan Rushby, CEO and founder of Carmoola, said: “Millions of drivers could receive compensation after not being fully informed about how broker incentives affected the cost of their finance.

“The FCA has now confirmed a framework for putting that right. What matters now is whether drivers actually receive compensation quickly, clearly and without hassle.

“Redress must reflect genuine harm. But it must also be applied proportionately and consistently.

“Restoring confidence depends on delivering compensation clearly, consistently and as quickly as possible. Our research shows 73% of drivers say access to fair and affordable finance is crucial to owning a car, and 61% worry it could become harder to access.

“That balance is critical. We believe car finance should be simple to understand, transparent in how it works, and fair in how it treats people.

“Trust now has to be earned. That is a healthy shift for the market.”