Understanding Your Car Finance Settlement Offer
Information for Olton Alexander clients
Some lenders are offering compensation before the legal challenge to the FCA’s motor finance compensation scheme has finished. This guide explains what an early offer means, the options available and how we can help you decide what to do next.
Why is my lender making an offer now?
The FCA introduced a compensation scheme in March 2026 for eligible motor finance agreements taken out between 6 April 2007 and 1 November 2024. It is intended to compensate customers who were not properly told important information about their finance arrangements.
The scheme was challenged by Volkswagen Financial Services, Mercedes Benz Financial Services, Crédit Agricole Auto Finance and Consumer Voice, represented by Courmacs Legal. Parts of it are on hold while the legal challenge is considered.
Although lenders do not currently have to pay compensation under the suspended parts of the scheme, some are choosing to make settlement offers now. Not every client or agreement will receive an early offer.
What should I do if I receive an offer?
Received a settlement offer?
Please send us the full letter or email, including the calculation, acceptance form and response deadline, as soon as possible.
We can help you understand the amount offered and what accepting would mean for your claim.
Look out for our emails and text messages. We may need information or instructions from you to deal with the offer within the lender’s deadline.
Has the FCA approved my offer?
No. The FCA supports early offers where the compensation is at least what the customer would receive under the scheme being challenged. It has not checked your individual offer, its terms or your circumstances.
How should the compensation be calculated?
Your lender should explain why compensation is due and show how it has calculated the offer using the scheme’s approach. Send us the calculation with the offer so we can help you understand it and raise any questions with your lender.
Are there limits on the amount?
Yes. The scheme being challenged includes limits, often called “caps”, on some compensation amounts. Your lender should clearly show if a cap has affected your calculation.
What if I still owe money on my finance?
Your lender may use compensation against money you still owe and pay you any remaining balance. This is often called “set off”. Check how much would reduce your finance balance and how much, if anything, you would receive in cash.
Understanding Your Options
Do I have to accept?
THE CHOICE IS YOURS
You can accept the offer or wait for the legal challenge to finish. We can explain the offer and help you understand your options before you decide.
Bringing a claim in the county court is another possible route. If you are considering court action, seek independent legal advice about its costs, risks and suitability.
What happens if I accept?
An early offer is intended to settle the complaint it covers permanently. This is called a “full and final settlement”.
Before accepting, you need to understand that:
- You cannot claim additional compensation for the same complaint later, even if the legal outcome would have meant a higher payment.
- If the legal outcome would have meant less compensation, or none, your lender cannot ask you to repay the settlement because of that outcome.
- The offer terms will usually say the lender will treat the commission complaint covered by the settlement as withdrawn.
- You cannot take that settled commission complaint to the Financial Ombudsman Service and are unlikely to be able to complain about the same matter again.
- Accepting could affect your ability to bring or continue court proceedings and the outcome of any existing case.
Important: Check which agreement and complaint the offer covers. If you have several claims, do not assume one offer settles all of them.
What happens if I wait?
Your lender will still need to tell you whether compensation is due and, if so, how much. There is no confirmed payment date while the legal challenge continues, and further delays are possible.
The legal outcome may change who qualifies for compensation and how much is payable. Any eventual payment could be higher or lower than the current offer. We can talk this through with you before you decide.
Can the Financial Ombudsman review this offer?
No. The Financial Ombudsman Service cannot review this type of early settlement offer. If you wait instead, it can review the eventual outcome of your complaint at a later stage, under a compensation scheme or the usual complaints process if there is no scheme.
Representation and Staying Safe
What if I have signed up with more than one firm?
You may have made several enquiries or signed up with different firms without realising they were pursuing the same complaint. Your lender may ask you to confirm who you want it to deal with.
If you are worried that more than one firm is acting for you, or you are unsure what you have signed, please contact us. We can help you understand your situation and the options available.
It is worth checking which firms you have instructed, what work each says it has carried out and whether any fees or cancellation charges may apply. More than one firm may say it is entitled to a fee for the same complaint.
Who represents you is your decision. If you are unsure which firms you have signed up with or what this means for you, speak to us. We can help you understand what has happened and talk through your options.
Can Olton Alexander help with my offer?
Yes. If you receive an offer, send it to us and our team can talk it through with you. We can explain how the amount has been calculated, what the terms mean and what accepting or waiting could mean for you.
If anything is unclear, we can help identify the questions that need answering and, where authorised, raise them with your lender.
You do not need to work through it on your own. Ask us about anything you are unsure of before making a decision.
How can I protect myself from scams?
Check that the vehicle and agreement details in the offer are correct. Be cautious about unexpected calls or messages asking for personal information or payment.
- Never share your passwords, PINs or security codes.
- Only provide bank details once you are certain who you are dealing with. A genuine lender may need your account number and sort code to pay compensation.
- Your lender should not ask you to pay a fee to release compensation. Any contractual fee owed to a representative is separate.
If you are unsure whether an offer, call or message is genuine, or have any doubts about what you have received, contact us. We will be happy to help you check it before you respond or share any information.
Speak to Our Team
We’re Here to Help
If you have an offer to send us or any questions about your claim, email us or call our team. Please include your claim reference so we can locate your case.
Call: 01942 800 000
If anything is worrying you, or you would simply like to talk your offer through, please get in touch. Our team is here to listen, answer your questions and help you feel clear about your options.
Important Information
This guide provides general information about voluntary settlement offers based on the FCA scheme. It is not individual legal advice and should be read alongside the lender’s offer terms and the FCA factsheet. If you do not understand the consequences of accepting, ask for clarification or seek independent advice before deciding.
Olton Alexander Limited
Morland House, 18 The Parks, Newton-le-Willows, WA12 0JQ
FCA regulated claims management company. FRN 833941.
