Close Brothers Car Finance Claim — PCP & HP Compensation 2026
Scheme status (updated 5 August 2026): parts of the FCA motor finance redress scheme are temporarily suspended while the Upper Tribunal considers legal challenges. Lenders do not currently have to calculate or pay compensation under the scheme, the original decision and payment dates no longer apply, and no payment under the scheme is guaranteed. If the scheme proceeds, first payments are expected in 2027 at the earliest. Any dates mentioned below were set before the suspension.
Close Brothers Motor Finance is one of the most significant lenders in the FCA motor finance redress scheme (PS26/3, confirmed 30 March 2026). Close Brothers was a key defendant in the October 2024 Court of Appeal cases that established the legal framework for the entire scheme — and has set aside £300 million for redress. If you financed a vehicle through Close Brothers between April 2007 and November 2024, you may be owed compensation averaging £829.
In this guide
- Who Is Close Brothers Motor Finance?
- The Case Against Close Brothers — Hopcraft v Close Brothers
- Close Brothers’ Financial Position — Why Claiming Early Matters
- Is Close Brothers Motor Finance Covered by PS26/3?
- Three Grounds for a Close Brothers Claim
- Are You Eligible to Claim?
- How Much Could You Receive?
- How Close Brothers Compares to Other Lenders
- Scheme Timetable (Original Dates, Now Suspended)
- How to Complain to Close Brothers Motor Finance
- Related Pages
- Frequently Asked Questions
- Our Partner's Fees Explained
- Think You May Have a Motor Finance Claim?
Who Is Close Brothers Motor Finance?
Close Brothers Motor Finance Limited is the vehicle finance arm of Close Brothers Group plc, a UK merchant banking group. It provided PCP and HP agreements through a nationwide network of franchised and independent car dealerships. Close Brothers is a major independent motor finance lender — unlike manufacturer-captive lenders it had no brand association with any vehicle marque, meaning all three PS26/3 grounds apply in full.
Close Brothers has attracted significant attention throughout the car finance scandal for two reasons: it was a named defendant in the landmark October 2024 Court of Appeal cases that established the Johnson Remedy, and it has faced substantial questions about its financial resilience in meeting its redress obligations.
The Case Against Close Brothers — Hopcraft v Close Brothers
In October 2024, the Court of Appeal decided three joined cases that transformed the car finance mis-selling landscape. One of these — Hopcraft v Close Brothers — directly involved Close Brothers Motor Finance as a defendant. The Court found that Close Brothers had failed to adequately disclose commission arrangements in a way that created an unfair relationship under Section 140A of the Consumer Credit Act 1974.
The Hopcraft case contributed directly to the FCA launching PS26/3 and to the confirmation of the Johnson Remedy — the higher compensation calculation that applies in the most serious cases. Close Brothers subsequently appealed to the Supreme Court, which upheld the Court of Appeal’s approach in August 2025, confirming the legal basis for widespread compensation. Close Brothers now faces redress obligations across its entire eligible portfolio.
Full explanation of the Johnson Remedy: The Johnson Remedy — Full Commission Repayment Explained
Close Brothers’ Financial Position — Why Claiming Early Matters
Close Brothers is the lender most frequently discussed in the financial press in relation to financial resilience risk. The company has taken significant steps to manage its balance sheet, including selling its asset management division to Oaktree Capital to raise capital. Close Brothers has publicly acknowledged “material uncertainty” in relation to its redress liabilities in its financial statements.
This does not mean Close Brothers will fail to pay — £300 million has been set aside and the FCA is closely supervising all participating lenders. However, the FCA has also confirmed that motor finance redress is not covered by the Financial Services Compensation Scheme (FSCS). If a lender were to enter administration before paying redress, claimants would become unsecured creditors.
Practical implication: complaining before 30 June 2026 places you in the earliest payment cohort — a decision by September 2026 and payment by November 2026. Waiting could mean payment as late as 2027 or 2028. For Close Brothers specifically, being in the earliest cohort is meaningful protection.
See: What If My Lender Goes Bust?
Is Close Brothers Motor Finance Covered by PS26/3?
Yes. Close Brothers Motor Finance Limited is FCA-regulated and all regulated PCP and HP agreements it arranged through UK dealer networks between 6 April 2007 and 1 November 2024 are within scope of PS26/3. The complaint deadline is 31 August 2027 — but complaining before 30 June 2026 (post-2014 agreements) or 31 August 2026 (pre-2014 agreements) is strongly advisable.
Three Grounds for a Close Brothers Claim
1. Discretionary Commission Arrangements (DCAs)
Close Brothers was a primary DCA lender. Prior to 28 January 2021, dealers arranging finance through Close Brothers could set your interest rate within a lender-defined range. The higher they pushed it, the more commission they earned. The Hopcraft case established that this arrangement was not adequately disclosed to customers. MoneySavingExpert survey data from the FCA review period found DCA use on Close Brothers agreements was widespread.
See: What Is a DCA?
2. Unfairly High Fixed Commission
Post-January 2021 agreements may qualify where the fixed commission paid by Close Brothers to the dealer was at least 39% of the total cost of credit and 10% of the loan amount. This applies to all Close Brothers agreements through to November 2024.
3. Contractual Ties
Because Close Brothers is an independent third-party lender with no manufacturer brand association, the contractual tie ground applies in full without the captive lender exclusion. Where Close Brothers had exclusive or preferential arrangements with specific dealer networks that were not disclosed to the customer, this is compensable under PS26/3.
Are You Eligible to Claim?
| Your situation | Likely eligible? |
|---|---|
| Financed a car, van or motorbike through Close Brothers on PCP or HP between 6 April 2007 and 1 November 2024 | YES |
| Agreement was in your personal name | YES |
| You no longer own the vehicle | YES |
| Finance already ended or paid off | YES |
| Settled the agreement early | YES |
| No longer have original paperwork | YES — agreements can be traced |
| Close Brothers previously rejected your complaint | YES — re-submit under all three PS26/3 grounds |
| Used a dealer who has since closed | YES — claim is against the lender, not the dealer |
| Agreement started after 1 November 2024 | NOT ELIGIBLE |
| Personal Contract Hire / leasing arrangement | NOT ELIGIBLE |
| Finance taken out by a limited company | NOT ELIGIBLE under FCA scheme |
How Much Could You Receive?
The FCA confirmed average payout is £829 per eligible agreement, calculated using the hybrid remedy — the average of your estimated interest overpayment (using a 17% APR adjustment for post-April 2014 agreements and 21% for pre-April 2014 agreements) and the commission paid by Close Brothers to the dealer, plus compensatory interest at Bank of England base rate plus 1% per year (minimum 3%) from the date of each overpayment.
In serious cases where commission was at least 50% of the total cost of credit and 22.5% of the loan amount, the Johnson Remedy applies — full repayment of the commission rather than the hybrid remedy. Given Close Brothers’ role in the Hopcraft case, the Johnson Remedy may apply more frequently to Close Brothers agreements than to many other lenders.
→ Use our PS26/3 Calculator to estimate your specific payout
Had multiple Close Brothers agreements? See: Multiple Car Finance Agreements
How Close Brothers Compares to Other Lenders
| Lender | Provision set aside |
|---|---|
| Lloyds / Black Horse | £1.95 billion |
| Santander Consumer Finance | £461 million |
| Mercedes-Benz Financial Services | £424 million |
| Northridge Finance (Bank of Ireland UK) | £350 million |
| Barclays Partner Finance | £325 million |
| Close Brothers Motor Finance | £300 million |
| BMW Financial Services | £277 million |
Scheme Timetable (Original Dates, Now Suspended)
Post-April 2014 agreements: Complain before 30 June 2026 → Close Brothers must respond by 30 September 2026 → payment by November 2026
Pre-April 2014 agreements: Complain before 31 August 2026 → decision by 30 November 2026 → payment by January 2027
If you do not complain: Close Brothers must contact you by December 2026 (post-2014) or February 2027 (pre-2014) — but payment could be as late as 2027 or 2028
Final complaint deadline: 31 August 2027
Full explanation: Scheme 1 vs Scheme 2 — What’s the Difference?
How to Complain to Close Brothers Motor Finance
Submit your complaint in writing to Close Brothers Motor Finance. Use the FCA’s official lender list at fca.org.uk/consumers/car-finance-complaints/list-lenders for the current complaint contact details. Include:
- Your full name and date of birth
- Your address at the time of the agreement
- The vehicle make, model and registration number if known
- The approximate start date of the finance agreement
- A statement that you are complaining about undisclosed commission arrangements under the FCA motor finance redress scheme (PS26/3)
- A reference to the Hopcraft v Close Brothers Court of Appeal case if appropriate
No paperwork? See: Claiming Without Paperwork
Related Pages
Black Horse Car Finance Claims
Multiple Car Finance Agreements
Frequently Asked Questions
What is the Hopcraft v Close Brothers case?
Hopcraft v Close Brothers was one of three joined Court of Appeal cases decided in October 2024 that transformed the car finance mis-selling landscape. The Court found that Close Brothers had failed to adequately disclose commission arrangements, creating an unfair relationship under Section 140A of the Consumer Credit Act 1974. The case directly contributed to the FCA launching PS26/3 and to the confirmation of the Johnson Remedy as the appropriate compensation for the most serious cases.
Close Brothers previously rejected my complaint. Can I re-submit?
Yes. Many early rejections were assessed only against DCA criteria before the full scheme was confirmed. PS26/3 now covers three grounds — DCAs, unfairly high fixed commission, and contractual ties. Re-submit under all three grounds. Given Close Brothers’ role in the Hopcraft case, a re-submission is strongly worth pursuing.
I am worried about Close Brothers’ financial position. Should I still claim?
Complaining is free and puts your complaint on record. £300 million has been set aside and the FCA is closely supervising compliance. Under the original timetable, early complainants were to be paid first; those dates are suspended and no payment under the scheme is guaranteed while the legal challenges run.
Does the Johnson Remedy apply to Close Brothers agreements?
Potentially yes. Close Brothers was a named defendant in the Hopcraft case which directly contributed to the Johnson Remedy being confirmed by the Supreme Court. Where commission on your Close Brothers agreement was at least 50% of the total cost of credit and 22.5% of the loan amount, the Johnson Remedy — full commission repayment — applies rather than the hybrid remedy. See: The Johnson Remedy Explained
I financed a used car through an independent dealer using Close Brothers. Am I covered?
Yes. Close Brothers financed both new and used vehicles through franchised and independent dealer networks. PS26/3 covers used car agreements. See: Used Car Finance Claim
I had multiple Close Brothers agreements. Can I claim for all?
Yes. Each eligible agreement is a separate claim with a separate potential payout. See: Multiple Car Finance Agreements
How long will a Close Brothers claim take?
Under the original timetable, complaints submitted before 30 June 2026 were due a response by 30 September 2026 and payment by November 2026; those dates are suspended and no longer apply as stated. See: How Long Does a Car Finance Claim Take?
The dealership I used has closed. Can I still claim against Close Brothers?
Yes. Your claim is against Close Brothers as the lender, not the dealership. The dealer closing has no effect on your eligibility. See: What If the Dealership Has Closed?
Close Brothers has set aside £300 million for PS26/3 redress. The FCA confirmed average payout is £829. Complain before 30 June 2026 — paid by November 2026. No paperwork needed. No win no fee.
Think You May Have a Motor Finance Claim?
The FCA estimates average compensation of around £830 per eligible agreement, but eligibility and payment amounts vary. Some customers may receive nothing. Complaints about agreements started from 1 April 2014 should be submitted by 30 June 2026 to be considered under the earlier timetable. Different dates apply to older agreements. The scheme is currently subject to legal challenge, so dates and payment timings may change.
