FCA’S MOTOR FINANCE REDRESS SCHEME POLCY STATEMENT
On 30th March 2026, the FCA published their Policy Statement, to finalise their expectations relating to Motor Finance Redress Schemes.
The FCA have looked at three areas where they consider that the lender was likely to have acted unfairly:
Tied Arrangements
Where there was a contractual tie between the lender and the dealer (broker), that provided the lender with exclusivity or a right of first refusal.
High Commission
Where the lender paid commission paid to the dealer (broker) which was equal to or great than 39% of the total cost of credit and 01% of the loan amount.
Discretionary Commission Arrangement (DCA)
Where the dealer could influence the interest rate, to achieve higher commission.
The FCA has estimated that more than 66% of Motor Finance Agreements dated since April 2007 were NOT unfair.
At Stour Vale, we have been working through our records to assess whether there were any actions or omissions that the FCA would consider ‘unfair’.
It is clear from our assessment that all of our finance agreements are considered ‘fair’ by the parameters of the FCA’s Policy Statement issued in March.
So all of our finance agreements fall within the 66+% of Motor Finance agreements that will not require a redress payment.
Did Stour Vale Finance Ever Use A Tied Arrangement?
NO
Stour Vale Finance has never had a ‘tied arrangement’ with a dealer or any broker.
Stour Vale Finance would not be considered suitable for a tied arrangement.
As a small, family-run motor finance provider, specialising in sub-prime lending, Stour Vale Finance only approved applications from customers who lived in the West Midlands area.
And as a sub-prime lender, in the vast majority of cases dealers would only send applications to us where the customer had been declined by at least one other finance provider.
Did Stour Vale Finance Ever Pay High Commission?
NO
As a small, local and family-run, sub-prime lender, when receiving an application from a dealer it was understood that the customer’s finance application had likely been declined by one or more other lenders before it reached us.
As a sub-prime lender we have never paid ‘high commission’. In fact in many cases, no commission was paid.
When commission was paid to the dealer, it was typically less than 10% of the Total Charge for Credit and less than 5% of the Loan Value.
In all cases, the commission paid was lower than the thresholds for ‘high commission’ suggested by the FCA’s proposed Redress Scheme.
Did Stour Vale Finance Every Use A Discretionary Commission Arrangement / DCA?
NO
We have never offered or provided a Discretionary Commission Arrangement.
The interest rate has always been determined by an experienced account manager at Stour Vale Finance, based solely on an assessment of the credit risk, the age of the vehicle, the amount of finance and the term of the finance.
The dealer has never been able to influence the interest rate (or any other finance related costs) to the detriment of the customer, in order to increase their commission (or any other benefit or remuneration).
Where the customer’s email was provided in the application, the quote was always emailed to both the dealer and the customer by Stour Vale Finance at approximately the same time.
Where we had no email address for the customer, the quote was printed and posted to the customer on the same day.
There was never an opportunity for the dealer to review the quote and request an amendment before the quote had been issued to the customer.
Stour Vale’s Redress Scheme Implementation Scheme Plans
No Redress Payments will be made, because our assessment shows that we acted fairly within the terms of the FCA’s Policy Statement.
However, we will be contacting customers who have complained (or their claims company), to let them know that no Redress Payment will be made and to explain why.
We will also let customers know their options if they wish to pursue the complaint further.
Schedule for Action
30th March 2026: ‘Implementation Period’ of 3 to 5 months commences
30th June 2026 to 30th November 2026: We will contact all customers who have made a complaint (or their claims company)
PLEASE NOTE: These details are correct as at 08/04/2026. We will continue to monitor for any changes or different interpretations of the FCA’s Policy Statement and review our position accordingly