1st Apr 2026 09:17
(Alliance News) - S&U PLC on Wednesday welcomed the UK Financial Conduct Authority's motor finance remedy plan, which it believes slashes the number of Advantage customers eligible for redress.
S&U shares rose 9.0% to 2,070.00 pence each in London on Wednesday morning.
The Solihull, England-based firm, which provided motor financing through Advantage, said the unit never offered discretionary commission arrangements commissions, which has been at the heart of the saga. DCAs, the FCA said, allowed brokers to adjust interest rates offered to customers.
Karl Werner, the chief executive of S&U's Advantage, said: "Advantage has never offered DCA commissions or engaged in tied arrangements. Our commission levels as a proportion of the charge for credit are generally well within those proposed for redress by the FCA and only exceed them for very small loans. Even before the final rules were published nearly 98% of Advantage customers did not qualify. We anticipate these finalised FCA proposals to halve the number of our customers that are eligible for redress under the scheme.
"Advantage also welcomed the simplification of the redress process, particularly on how customers should be contacted. The company also agreed with the FCA's proposal that the grounds for rebutting claims should include cases where there was no better deal available for the customer."
On Monday, the FCA confirmed it will proceed with an industry-wide motor finance redress scheme, aiming to compensate millions of customers who were treated unfairly by lenders.
The regulator estimated around 12.1 million agreements will be eligible for redress, down from 14.2 million proposed at the consultation stage, after tightening eligibility criteria.
The scheme is expected to see firms pay out around GBP7.5 billion in compensation, with total costs including administration estimated at GBP9.1 billion. This is lower than earlier projections of up to GBP11 billion.
Werner added: "Although a redress scheme of any kind is not justified for Advantage in our view, we are pleased that this matter can now be concluded by the early Autumn. The provisions we have made for its costs will prove more than adequate. It should therefore in no way impede the ambitious plans we now have in place for building Advantage."
By Eric Cunha, Alliance News news editor
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