🧾 The FCA’s Proposal to Cut Statutory Interest on Redress: Another Win for Lenders, Another Blow to Consumers

We’ve seen the financial industry time and again put profits before people.

But even by historic standards, the Financial Conduct Authority’s latest consultation—which proposes cutting the statutory redress interest rate—represents yet another staggering failure to stand up for consumer rights.

📉 What’s Being Proposed?

Currently, when consumers are awarded compensation for being mis-sold a financial product or treated unfairly, they are also entitled to 8% per annum statutory interest.

This interest is designed to reflect the loss of use of money and the time value of funds that were wrongly taken or unfairly retained.

Now, the FCA is consulting on reducing that 8% rate.

Let’s be clear: this is not a small technical adjustment.

It’s a blatant erosion of one of the few remaining deterrents to financial firms engaging in misconduct.

⚠️ A Regulator That Won’t Regulate

The FCA claims it wants to “reflect the economic environment” or align with other benchmarks—but this is just regulatory spin.

What this proposal really does is send another loud, clear message to the financial industry:

“Do what you like. If you get caught, you’ll still walk away with a profit.”

This weakening of the redress system removes any meaningful incentive for firms to behave ethically or put consumers first.

It’s yet another sign that the regulator is more concerned about the financial health of the industry than the financial justice of the people it is supposed to protect.

🏦 A Culture of Greed with No Consequence

This isn’t a standalone failure. It’s part of a long-running pattern of regulatory weakness and moral neglect.

Let’s look at the scandals:

• Bank Charges Scandal – Unfair overdraft fees that punished the poorest customers.
• Default Sums Scandal – Unfair credit card and loan late payment fees that accumulated in punitive ways.
• PPI Scandal – Tens of millions of people mis-sold an insurance wasn’t needed or understood.
• Motor Finance Commission Scandal – Lenders and dealerships profiting from secret commissions on finance deals.

Every scandal has seen the finance industry walked away in profit, unscathed at the top despite compensation being paid to some consumers

Now, with statutory interest under threat, even that thin layer of financial justice is being peeled away.

💥 Removing Deterrents Fuels More Misconduct

The 8% statutory interest has always served a dual purpose:

• It compensates victims for the loss of use of their money.
• And more importantly, it penalises firms for bad behaviour.

Remove that penalty, and you remove the last incentive to act fairly in the first place.

The FCA’s consultation doesn’t modernise the system—it emasculates it.

🧭 Where Do We Stand?

At Your Money Claim, we believe:

• The 8% statutory interest is not too high—it is barely adequate.
• The redress system should deter wrongdoing, not minimise its financial impact.
• The FCA must be held to account for its track record of appeasement rather than enforcement.

We call on regulators, lawmakers, and the public to see this consultation for what it is: a direct threat to the fragile promise of justice for mis-sold consumers.

📢 Final Word

If this proposal is allowed to proceed, the message will be clear: regulation is optional, and accountability is negotiable. That’s not regulation—it’s surrender.

We urge consumers and campaigners to make their voices heard in this consultation. Justice without consequence is no justice at all.

YOUR MONEY CLAIM

🚗 The FCA’s Contradictory Position on Motor Finance Commission Redress: Whose Side Are They Really On?

At Your Money Claim, we’ve long championed transparency, fairness, and justice for consumers misled or mistreated by financial institutions. That’s why the FCA’s recent behaviour regarding the potential introduction of a redress scheme for motor finance commission claims is not only puzzling—it’s deeply troubling.

⚖️ The FCA’s Supreme Court Submission: Protecting Industry Over Consumers?

In a submission to the UK Supreme Court, the FCA made its stance alarmingly clear: it stood not with consumers—but against them.

The regulator argued that a judgment in favour of consumers in motor finance commission claims could pose a significant risk of financial harm to the motor finance industry.

Let that sink in.

The very body tasked with protecting consumers made a conscious choice to shield the financial institutions that may have engaged in misleading, non-transparent, or unfair practices.

This position undermines the FCA’s statutory obligations under the Financial Services and Markets Act 2000—including the need to protect consumers and enhance the integrity of the UK financial system.

🔁 A Redress Scheme: Welcome, But at What Cost?

Following significant pressure, the FCA has now announced that it is considering a redress scheme. We welcome this development—but only if it results in full, fair, and timely compensation for all affected individuals.

A redress scheme could see a much higher percentage of consumers compensated, and in a much shorter period of time.

However, let us be crystal clear: the FCA’s change in tone does not absolve it of its earlier contradictions.

💰 The PPI Parallel: Case-by-Case Resolution Is Less Burdensome

There is a painful irony here.

During the PPI scandal, redress was primarily resolved on a case-by-case basis, allowing claims to be individually assessed and staggered over time.

This approach allowed firms to manage financial exposure incrementally, avoiding a full-scale, immediate financial shock to the industry.

The FCA’s Supreme Court intervention suggests that even a staggered approach—through claims brought individually—could be too financially damaging for the motor finance sector. That’s a clear contradiction.

❗ The Core Contradiction

Let’s break it down:

• The FCA opposed a consumer-friendly judgment on the grounds that mass payouts could harm the motor finance sector.
• The FCA is now proposing a redress scheme, which by nature would most certainly be far more financially burdensome than individual claims.
• Meanwhile, consumers are still waiting, and firms that profited from non-disclosed commission arrangements continue to benefit from more regulatory hesitancy.

This contradiction calls into serious question the FCA’s impartiality and commitment to consumer protection. Either consumer redress is financially manageable (as PPI proved), or the industry’s fragility is being used as a smokescreen to delay justice.

🗣️ Our Position

At Your Money Claim, we support any process that ensures affected consumers are compensated fairly.

We support a redress scheme—but it must not be a vehicle for delay, dilution, or escape.

We also believe that case-by-case claims remain a legitimate and necessary route.

In fact, they may be less damaging to firms than a sudden, mandatory redress rollout.

Any argument to the contrary is illogical and undermines the very premise of financial justice.

📢 Final Word

The FCA cannot have it both ways.

Either it supports consumer redress, in which case it must stop impeding it through legal manoeuvres—or it risks losing the trust of the very public it was created to protect.

If you’ve taken out a motor finance agreement and suspect a hidden commission may have been involved, we’re here to help. Justice delayed is not justice denied—but it’s time it was delivered.

YOUR MONEY CLAIM

YOUR MONEY CLAIM

YOUR MONEY CLAIM