Why a withdrawal is telling

1. It avoids a calculation benchmark in open court. The High Court already backed FOS last year. An appeal judgment could have clarified how redress is calculated—typically a transparent “difference-in-interest” approach—setting a precedent across thousands of cases. Withdrawing sidesteps that clarity and avoids a legal precedent.
2. It keeps the path clear for the Financial Conduct Authority’s (FCA) redress scheme. The FCA is planning a potentially controversial central scheme soon. A court opinion pointing to fairer calculation for consumers could clash with the FCA’s more conservative, averaged methodology, which aims to protect the motor finance industry.
3. It follows a reshaped legal landscape—without absolution. Recent rulings narrowed some arguments but left clear routes to redress for millions of consumers. The remaining battleground is the maths, not whether consumers deserve compensation.

The stakes: how the maths should get done

1. Refund the difference between what the customer paid at the charged APR and what they would have paid at the lowest permissible rate (often the “no-commission” rate).
2. Refund the remainingundisclosed commission, paid by the lender to the dealership as an incentive to increase the APR.
3. Then add appropriate interest on the overpayment.

What a weak FCA scheme risks doing

1. Protects the motor finance industry over consumer rights by failing to provide fair compensation to consumers.
2. Penalises consumers where firms’ records are incomplete, instead of requiring reconstruction using average figures as per the PPI scandal
3. Encourages future mis-selling by failing to provide clear financial deterrents, including substantial fines.

Was Barclays “guided” to step back? The optics certainly aren’t great

With Barclays withdrawing its appeal at this late stage, it looks like behind-the-scenes choreography to avoid an appellate judgment that cements robust redress maths.

That suspicion grows when the regulator, which has been very quiet about the case, is gearing up a central scheme, signalling relatively modest average payouts, and when CMCs and legal firms are pressing for transparent, case-accurate calculations.

What the FCA must do—now

1. Publish the calculation method, not just headlines. Use a clear, auditable difference-in-interest formula. Where data is missing, require firms to reconstruct from other sources; don’t let poor records shrink compensation.
2. Issue fines for the illegal activities which have been confirmed by the Supreme Court judgment.
3. Keep individual rights alive. No scheme should be encouraged where courts can justify higher redress.
4. Require firm-by-firm transparency. Publish each lender’s methodology, error rates and assurance results to show who is paying customers properly.

What this means for consumers—and how we’ll help

1. If your finance agreement predates 28 January 2021, you may be affected—especially where the dealer could tweak the APR via discretionary commission.
2. If your finance agreement included overtly large commission payments you may still be due compensation even if you took out the agreement after 2021.
3. If your finance agreement was provided to you as a result of loyalty or volume commission incentives you may be due compensation.
4. We’ll keep building evidence-led claims so your redress reflects your overcharge, even if this means court is the best route.
5. We’ll challenge any rules that under-compensate or excuse missing data the lender was obliged to keep.