With customers who have had a similar experience under Barclays Partner Finance likely to be the ones offered the opportunity for earlier payouts, a spokesperson for the lender said: “We recognise that some customers have already faced a considerable wait for an outcome on their motor finance complaints. By making these early settlement offers, we are giving some customers the option of receiving redress sooner, rather than waiting for the legal challenges and any subsequent FCA action to conclude.”

In the meantime, industry regulator, the Financial Conduct Authority, welcomed Barclays’ decision on the proviso that it “provide[s] consumers with no less than they would receive under the FCA's redress scheme”. Barclays stated: “Each offer will be calculated using the FCA’s redress scheme methodology.”

The FCA also acknowledged the “dilemma” that lenders face. With the likes of Volkswagen Financial Services and Mercedes-Benz Financial Services – two of the firms making a legal challenge against the FCA’s plans – having set aside £725 million and £424 million respectively for dealing with redress, the FCA says it “wants to see consumers receive the fairest outcome in as timely a way as possible and recognises that, in some cases, that may point to early settlement, while in others it may be appropriate to await greater legal certainty.”

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