It revealed that around 720,000 UK regulated motor finance loans it wrote between April 6, 2007, and November 1, 2024 would qualify for the scheme.
Of this 640,000 were discretionary commission arrangements and 80,000 weren’t. It expects the latter will be classed as ‘tied’ arrangements or ‘high commission’.
Now the details of the scheme have been published by the FCA, it believes that this will cost it £320m – slightly higher than its provision in January of £294m.
In the statement it said: ‘As set out below, the estimated cost of the scheme as published is c.£320m, broadly similar to the group’s existing provision, and can be comfortably absorbed by existing capital resources, leaving the group well positioned to continue delivering its strategy.’
However, it adds that its average payment will be around £500, which is lower than the average compensation quoted by the FCA of £829 as its loan values are smaller than the rest of the industry and therefore commission payments are lower.
‘At this stage, no provision changes have been recognised.’
Close Brothers also estimates that delivering these repayments will cost it £66m on top of the £14m it has already spent.
It added: ‘The group’s £294m provision is based on a number of probability weighted scenarios, one of which is the implementation of a redress scheme in line with the FCA’s original consultation paper published on 7 October 2025.
‘The c.£320m estimate reflects one scenario only, being the FCA’s policy statement, as well as a number of changes to the scheme itself relative to the FCA’s original consultation paper.’
Context:
Close Brothers faces £320m cost for motor finance redress covering 720,000 loans from 2007-2024.
Context:
This highlights the industry-wide impact of regulatory action on discretionary commission practices.
Context:
Average compensation of £500 per loan is below the FCA's £829 industry estimate due to smaller loan sizes.
