Carmaker captive finance houses are putting increasingly big sums of money to deal with the Financial Conduct Authority (FCA) redress scheme.
Accounts filed at Companies House for Volkswagen, Stellantis and Ford show big set asides.
Stellantis Financial Services earmarked £221m in its 2025 accounts for motor finance redress, almost a six-fold increase on the £37m it set aside the prior year.
Ford Credit FCE Bank has increased the amount it set aside in 2025 to £155m, a sharp increase on the £61m allocated in 2024.
In its financials lodged at Companies House Volkswagen said it had put aside £725m for redress scheme but said it had taken legal action to clarify its position.
“The rules do not reflect the specific elements of, or provide sufficient clarity on, how the scheme applies to a captive finance provider ‘model such as that of VWFS.
“For this reason, VWFS has initiated legal proceedings to obtain clarification from the competent Upper Tribunal regarding the issues. raised by VWFS in its capacity as a captive finance provider.
“While there remains uncertainty over the final outcome, there is possibility the final outflow could vary materially from the current provision,” it said.
Stellantis said its hike was partly attributable to the increased risk that could come through customer claims rather than a centralised FCA redress scheme.
“While the FCA has published final rules and guidance for an industry-wide consumer redress scheme, legal challenges brought against the scheme and the resulting uncertainty regarding its implementation have increased the possibility that customer remediation could arise, in whole or in part, through individual complaints and legal claims rather than exclusively through the FCA redress process.
“In addition, implementation of the FCA’s redress scheme has been deferred pending resolution of these legal challenges, with a court outcome not expected before December 2026 at the earliest.
“This prolonged period of uncertainty has increased the relevance of claims-led outcomes within management’s assessment. Accordingly, management considered both scheme-based and claims-led outcomes when estimating the provision. The claims-led scenario remains sensitive to assumptions relating to complaint and claim volumes, settlement outcomes and the timing of future settlements,” it said.
