CONRED 5 Motor finance commission consumer redress scheme (2014-2024)

For the purposes of this chapter:

1. (1) ‘Annual percentage rate of charge’ means the rate of the total charge for credit, expressed as an annual percentage of the total amount of credit, calculated in accordance with CONC App 1.
2. (2) ‘Commission’ has the meaning given in CONRED 5.1.3(1).
3. (3) Complaint includes:
   1. (a) a relevant motor finance DCA complaint; and
   2. (b) a motor finance non-DCA complaint,
   3. as each of those types of complaint are respectively defined in DISP App 5.1.2R and DISP App 5.1.3AR.
4. (4) ‘Consumer’ means any individual falling within the meaning of ‘consumers’ in section 404E of the Act and includes:   
   1. (a) a partnership consisting of 2 or 3 persons not all of whom are bodies corporate; and
   2. (b) an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership.
5. (5) ‘Credit broker’ means:
   1. (a) a credit broker; or
   2. (b) a person who was, at the time the relevant motor finance agreement was entered into, a credit broker.
6. (6) ‘Disclosure information’ means the information described in CONRED 5.3.10R(1)(a) to (c).
7. (7) ‘Durable medium’ means, in writing:
   1. (a) on paper; or
   2. (b) using any instrument which:
      1. (i) enables the recipient to store information addressed personally to the recipient in a way that is accessible for future reference and for a period of time adequate for the purposes of the information;
      2. (ii) allows the unchanged reproduction of the information stored; and
      3. (iii) is not communicated by way of a social media platform, a short message service (SMS) or another similar commercial messaging service.
8. (8) ‘Early settlement payment’ means any payment to fully or partially discharge the consumer’s indebtedness under a motor finance agreement before the time fixed by that agreement, taking into account any rebate calculated in accordance with the formula at regulation 4 of the Consumer Credit (Early Settlement) Regulations (SI 2004/1483).
9. (9) ‘High commission arrangement’ means an arrangement under which the total amount of commission was at least:
   1. (a) 39% of the total charge for credit; and
   2. (b) 10% of the total amount of credit.
10. (10) ‘Implementation period’ means a period of 3 months beginning with the scheme effective date.
11. (11) ‘Lender’ means:
    1. (a) a lender; or
    2. (b) a person who was, at the time the relevant motor finance agreement was entered into, a lender.
12. (12) ‘Motor finance agreement’ means a credit agreement which is not an exempt agreement under articles 60C to 60H of the Regulated Activities Order which, in whole or in part, financed the purchase of a motor vehicle or under which a motor vehicle was bailed or hired.
13. (13) ‘Motor vehicle’ means a mechanically propelled vehicle intended or adapted for use on roads to which the public has access.
14. (14) ‘Opt-in’ means a written notification from, or on behalf of, a consumer indicating that the consumer agrees for their scheme case to be assessed for liability under the scheme.
15. (15) ‘Opt-out’ means a written notification from, or on behalf of, a consumer indicating that the consumer does not want their scheme case to be assessed for liability under the scheme.
16. (16) ‘Primary records’ means records of the type described in CONRED 5 Annex 1.1G(1) to (3).
17. (17) ‘Priority debt’ means an obligation on the part of a consumer to make a payment:
    1. (a) where the remedies for a breach of that obligation potentially include seeking possession of, or seeking to exercise a power of sale in respect of:
       1. (i) the sole or main residence of the consumer (for example, an obligation to pay secured by a mortgage or charge in respect of land, an obligation to pay rent under a tenancy, or an obligation to make payment under a licence to occupy land); or
       2. (ii) the consumer’s essential goods or services (for example, an obligation to pay under a hire purchase, conditional sale or hire agreement that relates to, or an obligation to pay secured by a charge on, the consumer’s cooker, refrigerator, or the means to travel to work); or
    2. (b) where that obligation arises out of an order of the court, an Act or secondary legislation (for example, an obligation to pay council tax, child support maintenance, income tax or court fines); or
    3. (c) where that obligation arises under a contract for the provision of utility supplies (for example, water, gas or electricity).
18. (18) ‘Relevant arrangement’ has the meaning given in CONRED 5.2.19R(1) to (4).
19. (19) ‘Scheme’ means the consumer redress scheme created by this chapter.
20. (20) ‘Scheme case’ means a case that satisfies each of the conditions in CONRED 5.1.17R.
21. (21) ‘Scheme effective date’ means 31 March 2026 and is the date that the scheme created by this chapter comes into force.
22. (22) ‘Secondary records’ means:
    1. (a) contemporaneous records of the type described in CONRED 5 Annex 1.1G(1) to (3) relating to other consumers who were in a sufficiently similar position as the consumer in the scheme case, and which include information that demonstrates the standard practices of the lender or the credit broker at the relevant time; or
    2. (b) records of the type described in CONRED 5 Annex 1.1G(4).
23. (23) ‘Successor’ means a person who is a creditor for the purposes of section 140A of the CCA by virtue of section 140C(2) of that Act.
24. (24) ‘Tied arrangement’ means a contractual arrangement between a lender and a credit broker under which the credit broker is required to:
    1. (a) introduce consumers exclusively to the lender; or
    2. (b) give the lender the option to provide an offer of credit to the consumer before the credit broker is entitled to approach another lender in respect of that consumer (including a ‘right of first refusal’ or an equivalent right of priority).
25. (25) ‘Total amount of credit’ means the total sums made available under a motor finance agreement.
26. (26) ‘Total charge for credit’ means the true cost to the borrower of the credit provided, or to be provided, under an actual or prospective motor finance agreement, calculated in accordance with CONC App 1.
27. (27) ‘Total amount of commission’ has the meaning given in CONRED 5.1.3R(2).
28. (28) ‘Unfair relationship provisions’ means sections 140A to 140C of the CCA.
29. (29) ‘Very high commission arrangement’ means an arrangement under which the total amount of commission was at least:
    1. (a) 50% of the total charge for credit; and
    2. (b) 22.5% of the total amount of credit.

For the purposes of this chapter:

1. (1) ‘Commission’ means any commission, fee or other financial consideration or remuneration payable (directly or indirectly) by a lender to a credit broker in connection with the entering into of a specific motor finance agreement.
2. (2) ‘Total amount of commission’ means the sum of all commission payable in connection with the entering into of a specific motor finance agreement.
3. (3) All references to commission ‘payable’ refer to the amount of commission that the credit broker was entitled to receive under the arrangements providing for the payment of commission.
4. (4) In determining the amount of commission that was payable, the lender may refer to evidence of the actual amount of commission paid to a credit broker in connection with a specific motor finance agreement contained in its financial records (see CONRED 5 Annex 1.1G(1)(c)) if it is a reasonable proxy.   
5. (5) References to ‘discretionary commission arrangement’ are to be read as including any arrangement which would, if it had been entered into on or after 28 January 2021, have constituted a discretionary commission arrangement.

1. (1) The definition of commission captures any commission, fee or other financial consideration or remuneration payable in connection with the entering into of a specific motor finance agreement. As such, it will not capture sums that were payable for meeting aggregated transaction, performance or ‘volume’ targets rather than attributable to specific motor finance agreements entered into by consumers. A sum payable for meeting a target based on a specified cumulative total of transactions is not captured because that sum is not referable to any specific transaction comprised in that cumulative total. Firms are not required to retrospectively apportion payments that were not attributable to specific transactions at the time.
2. (2) By contrast, if a commission sum was at the time attributable to a specific motor finance agreement, it will be caught by these rules irrespective of the administrative arrangements for the settling of that sum with the credit broker. For example, a payment made to the credit broker’s head office (rather than local dealership) which was calculated as a percentage of the total amount of credit is captured by the definition of commission, even if all such sums the credit broker was entitled to receive during a specified period (eg, over the year or per quarter) were in practice settled through a single administrative payment made at a later date. In these circumstances, each commission sum comprised in that payment is attributable to the entering into of a specific motor finance agreements rather than to the meeting of an ‘aggregated’ target.
3. (3) The definition of commission also captures commission that is payable indirectly. This will include where commission that a credit broker was entitled to receive under the arrangements providing for the payment of commission were paid to the credit broker:
   1. (a) through an intermediary (including another credit broker); or
   2. (b) by another third party on behalf of the lender (for example, under an arrangement where another company in the same group as the lender agreed to make the payment).
4. (4) To identify the total amount of commission, the lender will need to calculate the sum of all commission payable in connection with the entering into of the relevant motor finance agreement. This will mean, for example, that:
   1. (a) where commission was payable under more than one type of commission arrangement (for example, where commission was payable under both a discretionary commission arrangement and a fixed fee commission arrangement), the total amount of commission is the sum of the commission payable under each type of commission arrangement;
   2. (b) it does not matter if different commission sums within the total amount of commission were payable to different administrative functions of the credit broker, or at different points in time (see also (2) above); and
   3. (c) where commission was payable to more than one credit broker in connection with the entering into of the same motor finance agreement, the total amount of commission is the sum of the commission payable to each of those credit brokers. 

1. (1) This rule applies where a single motor vehicle sales transaction was financed by more than one motor finance agreement.
2. (2) The lender should treat the transaction as a single scheme case for the purposes of the steps required under this chapter.
3. (3) Provisions requiring a determination of the following in respect of a scheme case are to be interpreted in accordance with (2):
   1. (a) whether one or more relevant arrangements is present; and
   2. (b) whether there was a failure to provide adequate disclosure of one or more relevant arrangements giving rise to an unfair relationship that caused loss or damage (see third step in CONRED 5.3).
4. (4) For the purposes of (3)(a):
   1. (a) the total amount of commission must be calculated by aggregating the total amount of commission for each motor finance agreement; and
   2. (b) to identify whether the definitions of high commission arrangement or very high commission arrangement are met, the following must be calculated by aggregating the relevant values for each motor finance agreement:
      1. (i) the total amount of commission;
      2. (ii) the total charge for credit; and
      3. (iii) the total amount of credit.
5. (5) CONRED 5.4.23R applies for the purposes of calculating redress in scheme cases to which this rule applies.  

1. (1) This chapter applies to a lender in respect of a motor finance agreement it entered into with a consumer:
   1. (a) in the circumstances described in (2);
   2. (b) where the unfair relationship provisions apply in connection with the motor finance agreement; and
   3. (c) where the consumer, at the time the agreement was entered into, was habitually resident in the UK.
2. (2) The circumstances referred to in (1)(a) are that:
   1. (a) there were arrangements between the lender and a credit broker in connection with the entering into of the agreement relating to the payment of commission; and
   2. (b) the agreement was entered into during the period beginning with 1 April 2014 and ending with 1 November 2024. 

1. The following provisions apply to a credit broker:
   1. (1) CONRED 5.1.9R;
   2. (2) CONRED 5.2.23G;
   3. (3) CONRED 5.2.28R;
   4. (4) CONRED 5.3.6R;
   5. (5) CONRED 5.4.29;
   6. (6) CONRED 5.5.6R; and
   7. (7) CONRED 5.9.1R.

Where a credit broker receives a complaint in relation to the subject matter of the scheme, it must:

1. (1) forward the complaint to the lender; and
2. (2) inform the consumer that the complaint has been forwarded to the lender.

1. (1) Where the conditions in (2) are met, this chapter applies to the following person as if it were the lender in scope of CONRED 5.1.6R:
   1. (a) for a motor finance agreement with a single successor, the successor; or
   2. (b) for a motor finance agreement with multiple successors, the person who became a successor first in time.
2. (2) The conditions are:
   1. (a) the motor finance agreement was entered into with a consumer by another person; and
   2. (b)(i) that person is a lender in scope of CONRED 5.1.6R and is subject to insolvency proceedings; or
   3.     (ii) that person would have been a lender in scope of CONRED 5.1.6R but for the fact it ceased to exist before the scheme effective date.

Subject to CONRED 5.1.10R, the following provisions apply to successors in respect of a motor finance agreement:

1. (1) CONRED 5.1.14G;
2. (2) CONRED 5.2.6R;
3. (3) CONRED 5.4.42R;
4. (4) CONRED 5.4.43G; and
5. (5) CONRED 5.9.1R.

1. (1) The definition of successor means that a person who has been assigned rights under a motor finance agreement will only be in scope if there was a legal assignment under section 136 of the Law of Property Act 1925, with notice being given to the consumer.
2. (2) A successor may be in scope of this scheme even if it is an unauthorised person because of the expanded definition of a relevant firm in section 404F(5) of the Act.

The subject matter of the scheme is whether, in a scheme case, there was inadequate disclosure of any of the following in connection with the entering into of a motor finance agreement:

1. (1) a discretionary commission arrangement;
2. (2) the payment of commission;
3. (3) a tied arrangement; or
4. (4) any other arrangement between a lender and a credit broker under which the credit broker was incentivised (directly or indirectly) to introduce consumers wishing to enter into motor finance agreements to that lender.

1. (1) A ‘scheme case’ is a case that satisfies each of the following conditions:
   1. (a) it involves a motor finance agreement falling within CONRED 5.1.6R;
   2. (b) the motor finance agreement was not cancelled;
   3. (c) commission was payable (directly or indirectly) by the lender to a credit broker in connection with the entering into of the motor finance agreement;
   4. (d) subject to (2), the total amount of credit did not exceed the amount specified in the second column of the table in CONRED 5.1.18R for the year in which the motor finance agreement was entered into;
   5. (e) subject to CONRED 5.1.19R, the consumer has not accepted an offer of redress from the lender or the credit broker:
      1. (i) for a claim directly arising out of a motor finance agreement in (a) that falls within the subject matter of this scheme; or
      2. (ii) in full and final settlement of all potential claims in connection with the consumer’s motor finance agreement;
   6. (f) the motor finance agreement in (a) has not been the subject of:
      1. (i) court proceedings where there has been a decision on the merits in relation to a claim falling within the subject matter of the scheme; or
      2. (ii) a complaint by the consumer to the Financial Ombudsman Service that falls within the subject matter of the scheme and where the merits of that complaint have been considered by the Financial Ombudsman Service; and
   7. (g) the lender determines, after having regard to the rules and guidance in CONRED 5.1.20G to CONRED 5.1.24R, that if the consumer brought a claim falling within the subject matter of the scheme against the lender under section 140A of the CCA:
      1. (i) the limitation period (in England and Wales, and Northern Ireland) would not have expired before the rules creating the scheme were made; or
      2. (ii) the claim would not be precluded by a period of prescription (in Scotland).
2. (2) The condition in (1)(d) does not apply where the motor vehicle to which the motor finance agreement relates was constructed or adapted to enable a person with a disability to travel in the vehicle as a driver or a passenger (and ‘disability’ has the same meaning as in section 6(1) of the Equality Act 2010).
3. (3) For the purposes of this rule, ‘cancelled’ means that the consumer exercised a statutory or contractual right of withdrawal or cancellation within an initial notice or ‘cooling off’ period which resulted in the motor finance agreement being cancelled (including where the motor finance agreement was cancelled because the consumer exercised a right to cancel an agreement for the supply of the motor vehicle).

1. (1) The limitation period for a claim under section 140A of the CCA seeking a monetary remedy is 6 years from the end of the credit relationship (which will normally be the end of the motor finance agreement) in England and Wales.
2. (2) Under section 32(1)(b) of the Limitation Act 1980, if any fact relevant to the claimant’s right of action has been deliberately concealed from them by the defendant or its agent (which may include the lender or the broker), the period of limitation will not begin to run until the claimant has discovered the concealment or could with reasonable diligence have discovered it.
3. (3) In an unfair relationship claim under section 140A of the CCA arising out of the inadequate disclosure of a discretionary commission arrangement, high commission arrangement and/or tied arrangement, the facts relevant to the claimant’s right of action will include the disclosure information described in CONRED 5.3.10R(1)(a) to (c) respectively.
4. (4) In applying section 32(1)(b) of the Limitation Act 1980, the lender must apply section 56(2) of the CCA, which deems that relevant antecedent negotiations have been conducted by the negotiator (for example, the credit broker) in the capacity of the creditor (for example, the lender) as well as in their actual capacity.
5. (5) Subject to (7), the fact or facts relevant to the claimant’s right of action are likely to have been deliberately concealed, and the claimant is likely to be able to show that they could not with reasonable diligence have discovered them, to the extent that the information in CONRED 5.3.10R(1)(a) to (c), as applicable, was not clearly and prominently provided in the manner described in CONRED 5.3.10R(2) to (4).
6. (6) It is unlikely that, where (5) applies, disclosure of the bare fact, or possibility, of commission being payable (for example, that commission ‘would’ be, ‘may’ be, ‘is’ or ‘is typically’ payable) will be sufficient for the defendant to argue either that there has not been any deliberate concealment of the facts relevant to the claimant’s right of action, or that the claimant could with reasonable diligence have discovered all such relevant facts. For example, even if there was disclosure that a commission would be paid, it is unlikely that a disclosure of this nature would, in and of itself, be sufficient to mean that there was no concealment of the fact that the credit broker was permitted to select the interest rate provided for under the motor finance agreement in a way that affected the amount of commission that would be received by the credit broker. Nor is it likely that the claimant could, with reasonable diligence, have discovered that fact based on such a disclosure.
7. (7) It is likely that the defendant will be able to demonstrate that the claimant could, with reasonable diligence, have discovered the facts relevant to their right of action such that the period of limitation will have begun to run from the end of the motor finance agreement (see (1)) where:
   1. (a) the unfair relationship claim relates solely to a high commission arrangement; and
   2. (b) there was clear and prominent disclosure, in the manner described in CONRED 5.3.10R(2) to (4), of the bare fact of, or possibility of, commission being payable (for example, that commission ‘would’ be, ‘may’ be, ‘is’ or ‘is typically’ payable), but not of the amount of commission payable to the credit broker in respect of the consumer’s agreement (ie, the amount of commission in monetary terms or the method by which the commission amount would be calculated such that the consumer was able to understand its size) (see CONRED 5.3.10R(1)(b)).
8. (8) In considering whether there was clear and prominent disclosure for the purposes of CONRED (5) and (7)(b), firms should have regard to CONRED 5.3.11G.

1. (1) The limitation period for a claim under section 140A of the CCA seeking a monetary remedy is 6 years from the end of the motor finance agreement in Northern Ireland.
2. (2) Under article 71(1)(b) of the Limitation (Northern Ireland) Order 1989 (SI 1989/1339 (N.I. 11)), if any fact relevant to the claimant’s right of action has been deliberately concealed from them by the defendant or its agent (which may include the lender or the credit broker), the period of limitation will not begin to run until the claimant has discovered the concealment or could with reasonable diligence have discovered it.
3. (3) The guidance set out in CONRED 5.1.21G(3) to (8) applies.

1. (1) In Scotland, time limits – referred to as prescription – applicable to bringing a legal claim are governed by the Prescription and Limitation (Scotland) Act 1973 (‘the 1973 Act’).
2. (2) The 1973 Act does not impose a period of prescription on an unfair relationship claim under section 140A of the CCA, or a remedy awarded pursuant to section 140B of the CCA.

For the purposes of CONRED 5.1.17R(1)(g), the applicable law is:

1. (1) that of the UK territory where, in connection with the motor finance agreement:
   1. (a) the consumer has agreed to the lender’s terms of business; and
   2. (b) those terms of business include a clause providing for the application of the law of a particular UK territory (that is, England and Wales, Northern Ireland or Scotland); or
2. (2) (if (1) does not apply) that of the UK territory where both the lender entered into the motor finance agreement and the consumer was habitually resident at the time the motor finance agreement was entered into; or
3. (3) (if neither (1) nor (2) apply) that of the UK territory where the consumer was habitually resident at the time the motor finance agreement was entered into; or
4. (4) (if none of (1), (2) or (3) apply) that of the UK territory where the lender entered into the motor finance agreement.

The lender must take the following steps in this chapter in respect of each motor finance agreement as applicable:

1. (1) first step – identify complaints it has received before the end of the implementation period;
2. (2) second step – identify motor finance agreements in respect of which it does not have a complaint;
3. (3) in respect of agreements identified under (1) and (2), in accordance with CONRED 5.2.9R and CONRED 5.2.11R, determine:
   1. (a) which are scheme cases; and
   2. (b) of the agreements that are scheme cases, whether there is one or more relevant arrangement present;
4. (4) for scheme cases that have one or more relevant arrangement identified in the first step (existing complaints) proceed to the third step;
5. (5) for scheme cases with one or more relevant arrangement identified in the second step, in accordance with CONRED 5.2.11R(2), invite the consumer to opt in to the scheme and, if the consumer opts in, proceed to the third step;
6. (6) third step – in accordance with CONRED 5.3, determine whether an unfair relationship exists or existed and, if it did, whether the unfairness caused any loss or damage;
7. (7) fourth step – calculate redress in accordance with CONRED 5.4;
8. (8) fifth step – send a provisional redress decision and, if necessary a redress determination, in accordance with CONRED 5.4.36R and CONRED 5.4.37R.

1. (1) A complaint which is a:
   1. (a) relevant motor finance DCA complaint; or
   2. (b) motor finance non-DCA complaint,
2. must be handled by a lender in accordance with the rules in this chapter, including any applicable time limits, notwithstanding any DISP time limits that would apply to the complaint but for this provision.
3. (2) This rule does not apply if a complaint falls outside the subject matter of the scheme.

Where a complaint is about matters that fall within the scheme and matters that do not, a lender must:

1. (1) in relation to the matters that do not, send the consumer a final response; and
2. (2) as applicable, send the final response in (1):
   1. (a) no later than 1 month after a provisional redress decision is accepted by a consumer under the scheme; or
   2. (b) at the same time as sending a redress determination under the scheme.

1. (1) For scheme cases with one or more relevant arrangement, lenders must determine whether there are any successors and, where one or more is identified, keep the successor(s) informed of the steps taken by the lender.
2. (2) Lenders and successors must cooperate with one another when carrying out their obligations under the scheme, including the sharing of information.
3. (3) Where a successor receives a complaint and a lender is responsible under the scheme for assessing that complaint, the successor must forward the complaint promptly to the lender and inform the consumer or their personal representative that it has done so.

1. (1) In relation to any scheme case, a lender may, at any time, make an offer to a consumer in the form of a provisional redress decision in a durable medium that includes the information set out in CONRED 5 Annex 2 to settle the case in full and final settlement of all claims relating to the subject matter of the scheme and which provides the consumer with 1 month to respond.
2. (2) Where an offer is made under (1), the lender must demonstrate in the provisional redress decision that the amount of the offer is no less than the maximum redress that would be available under CONRED 5.4 and may, as part of the offer, apply set-off under CONRED 5.4.24R, where applicable.
3. (3) Where the lender makes an offer in accordance with this rule, the lender is not required to complete any of the remaining steps set out in this chapter in relation to that motor finance agreement other than the fifth step.

1. (1) This rule applies to a complaint received before:
   1. (a) the scheme effective date; or
   2. (b) the end of the implementation period.
2. (2) Subject to (3), a lender must:
   1. (a) assess whether the complaint is in relation to a scheme case that meets the conditions set out in CONRED 5.1.17R;
   2. (b) where the case does not meet the conditions of a scheme case:
      1. (i) inform the consumer of that decision and the reasons for it by sending a redress determination in a durable medium containing the information in CONRED 5 Annex 5.1R; and
      2. (ii) send a final response at the same time as sending a redress determination in (i);
   3. (c) assess whether a scheme case identified in (a) includes one or more relevant arrangement (for the meaning of ‘relevant arrangement’ see CONRED 5.2.18G to CONRED 5.2.22R);
   4. (d) where the complaint relates to a scheme case which includes one or more relevant arrangement, complete the remaining steps in this chapter, as applicable, in relation to all relevant arrangements, including sending a first provisional redress decision to the complainant;
   5. (e) where the complaint relates to a scheme case which does not include a relevant arrangement:
      1. (i) inform the consumer of that decision and the reasons for it by sending a provisional redress decision in a durable medium which contains the information set out in CONRED 5 Annex 4.1R and which provides the consumer with 1 month to respond; and
      2. (ii) if applicable, send a final response in relation to any matters that do not fall within the scheme in accordance with (iii);
      3. (iii) a final response in (ii) must be sent either: (a) no later than one month after a provisional redress decision is accepted by a consumer under the scheme; or (b) at the same time as sending a redress determination under the scheme.
   6. (f) within a period of 6 months beginning with the scheme effective date, complete this step and any other steps in this chapter that are necessary to provide the complainant with their first redress determination or provisional redress decision; and
   7. (g) include a request to indicate whether the consumer is going to opt out of the scheme in a redress determination or provisional redress decision which is the first communication sent to a consumer in accordance with (f).
3. (3) Where a complaint to which this rule applies is a complaint in response to which, by the scheme effective date, a lender or credit broker has sent the complainant a final response which rejects the complaint:
   1. (a) paragraph (2) does not apply; and
   2. (b) CONRED 5.2.11R applies to the motor finance agreement to which the complaint relates as if no complaint had been made.

1. (1) In relation to a dual track case, if (2) applies, a lender may:
   1. (a) continue to process; or
   2. (b) pause processing,
   3. a scheme case in accordance with the requirements set out in this chapter.
2. (2) A lender may elect to pause the processing of a dual track case if the relevant court proceedings are not stayed or withdrawn.
3. (3) If a lender elects to pause the processing of a dual track case, it must issue a notice in a durable medium to a consumer at least 14 days before the lender intends to pause the processing of the dual track case.
4. (4) A notice under (3) must contain the following information:
   1. (a) that the lender will pause handling of the scheme case unless the lender receives evidence that the relevant court proceedings are stayed or withdrawn;
   2. (b) that the lender will resume processing the scheme case if the relevant court proceedings are stayed or withdrawn; and
   3. (c) a warning that a consumer may be required to pay the lender’s legal costs if the consumer decides to withdraw from the relevant court proceedings.
5. (5) A lender must resume processing a dual track case if at any time the relevant court proceedings are stayed or withdrawn.
6. (6) If a court issues a judgment in a dual track case, it will cease to be a scheme case and a lender will not be required to take any further action in relation to it.
7. (7) If a lender issues a notice in accordance with (3), it has the effect of suspending each deadline in this chapter which has not yet expired until the date the lender receives notice that:
   1. (a) proceedings are stayed or withdrawn; or
   2. (b) the date of judgment.
8. (8) In this rule:
   1. (a) a ‘dual track case’ means a scheme case in relation to which court proceedings have been issued in relation to the same motor finance agreement by, or on behalf of, a consumer in any court or tribunal in the United Kingdom; and
   2. (b) ‘withdrawn’ means discontinued or otherwise brought to an end, so that the court will not determine the parties’ rights or liabilities in respect of the claim.

1. (1) Subject to CONRED 5.2.9R(3), this rule applies to motor finance agreements in relation to which a complaint meeting the requirements in CONRED 5.2.9R(1) has not been received by a lender.
2. (2) A lender must:
   1. (a) identify whether the agreement meets the conditions of a scheme case in CONRED 5.1.17R;
   2. (b) assess whether a scheme case identified in (2)(a) includes at least one relevant arrangement;
   3. (c) where a scheme case includes at least one relevant arrangement, send a communication in a durable medium in the form set out in CONRED 5 Annex 6.1R to:
      1. (i) inform the consumer that the agreement is a scheme case and includes at least one relevant arrangement; and
      2. (ii) invite the consumer to opt in to the scheme within 6 months starting with the day the communication is sent by the lender;
   4. (d) where an agreement is not a scheme case because the condition in CONRED 5.1.17R(1)(g) is not met and it includes at least one relevant arrangement, inform the consumer of the decision that it is not a scheme case for that reason in a redress determination provided in a durable medium with the content set out in CONRED 5 Annex 7.1R; and
   5. (e) complete this step within a period of 9 months beginning with the scheme effective date.

1. (1) Where no complaint has been made to the lender about an existing motor finance agreement, there is no requirement for that lender to contact the relevant consumer under this scheme where the agreement is not a scheme case, unless CONRED 5.2.11R(2)(d) applies.
2. (2) Where no complaint has been made and there are no relevant arrangements in relation to a scheme case, there is no requirement for a lender to contact the relevant consumer. 

Where a lender cannot identify whether a case is a scheme case with one or more relevant arrangement in accordance with CONRED 5.2.9R(2)(a) and (c) or CONRED 5.2.11R(2)(a) and (b), it must:

1. (1) where the reason is because it does not have the relevant records and information, follow the rules and guidance set out in CONRED 5.2.23G to CONRED 5.2.28R; and
2. (2) where, having followed those rules and that guidance, it still cannot make that determination, follow the process set out in CONRED 5.2.29R to CONRED 5.2.31R. 

1. (1) Where the lender has not received an opt-in within 1 month of sending the communication in CONRED 5.2.11R(2)(c), the lender must, within 1 month, send the consumer an opt-in follow-up communication in a durable medium containing the information set out in CONRED 5 Annex 8.1R.
2. (2) Where the lender has not received an opt-in from the consumer within 1 month of the opt-in follow-up communication in (1), the lender must follow the process set out in CONRED 5.7.13R to CONRED 5.7.16R in taking all reasonable steps to contact the consumer.
3. (3) Subject to CONRED 5.4.40R, where a lender receives an opt-in more than 6 months after the consumer was sent the opt-in communication in accordance with CONRED 5.2.11R, the lender may determine not to proceed with the case. Upon deciding not to proceed, it must:
   1. (a) inform the consumer of that determination and the reasons for it in a provisional redress decision in a durable medium containing the information in CONRED 5 Annex 2; and
   2. (b) provide the consumer with 1 month to respond. 

1. (1) Paragraph (2) applies where, with respect to all scheme cases identified in CONRED 5.2.11R, the consumer has opted in within 6 months of being sent the opt-in communication in CONRED 5.2.11R(2)(c).
2. (2) The lender must:
   1. (a) within 7 days of receiving the response, send the consumer an acknowledgment in a durable medium to confirm that the scheme case is being assessed under the scheme and setting out the deadlines for next steps;
   2. (b) proceed to the third step; and
   3. (c) within a period of 3 months beginning with the date the response is received, complete any other steps in this chapter that are necessary to provide the complainant with a redress determination or provisional redress decision.
3. (3) Where a lender must send a communication to a consumer under CONRED 5.2.11R(2)(c), it may:
   1. (a) complete the remaining steps in this chapter in respect of that agreement before the expiry of the 9-month period referred to in that rule; and
   2. (b) send the provisional redress decision required by those steps with that communication.
4. (4) Where a lender sends a provisional redress communication under (3), the time within which the consumer is required to respond is the same as the 6-month period it has to respond to the communication inviting the consumer to opt in to the scheme referred to in CONRED 5.2.11R(2)(c). 

1. (1) This rule applies where a lender has sent a provisional redress decision under:
   1. (a) CONRED 5.2.9R(2)(e)(i);
   2. (b) CONRED 5.2.14R(3); or
   3. (c) CONRED 5.2.30R(1).
2. (2) Where the consumer responds to the provisional redress decision within 1 month stating that they do not wish to have their case considered under this scheme, the lender must, within a 7-day period beginning on the day the response is received, send the consumer a communication to:
   1. (a) acknowledge the response; and
   2. (b) explain that the case will not be dealt with any further.
3. (3) Where the consumer responds to the provisional redress decision within 1 month stating that they accept the decision, the lender must, within a 7-day period beginning on the day the response is received, send the consumer a communication acknowledging the acceptance.
4. (4) Where a consumer responds to the provisional redress decision within 1 month objecting to the decision, the lender must:
   1. (a) send an acknowledgment containing the information in CONRED 5 Annex 10.1R within 7 days, requiring the consumer to provide further details of the objection, including any evidence supporting the objection, within 1 month of the date of the acknowledgement;
   2. (b) decide whether it should proceed to the third step on the basis of the objection, including any representations and any supporting evidence from the consumer; and
   3. (c) undertake one of the actions set out in (5) within 2 months of:
      1. (i) the date it receives the further details of the objection; or
      2. (ii) where receives no further details within 1 month of the date of the acknowledgement in accordance with (a), the date of the expiry of that 1 month period.
5. (5) The actions in (4)(c) are:
   1. (a) send a redress determination confirming the provisional redress decision containing the information in CONRED 5 Annex 3; or
   2. (b) complete the remaining steps under this chapter necessary to provide the consumer with their next provisional redress decision or redress determination.
6. (6) Where the lender accepts the consumer’s objection, provided in accordance with (4), it must proceed to the third step in CONRED 5.3.
7. (7) Where the consumer does not respond to the provisional redress decision within 1 month, the lender must send a redress determination confirming the provisional redress decision containing the information in CONRED 5 Annex 3 within 1 month of the expiry of that period.
8. (8) Any communication sent by a lender under this rule must be sent in a durable medium. 

1. (1) This rule does not apply if the lender has sent:
   1. (a) an opt-in communication to the consumer within the prescribed deadlines in this chapter, and the deadline for the consumer to opt in has expired; or
   2. (b) a provisional redress decision or a redress determination to the consumer under any provision in this chapter.
2. (2) Where a lender receives a complaint from a consumer relating to a motor finance agreement after the end of the implementation period and before the end of a period of 17 months beginning with the scheme effective date, it must:
   1. (a) treat the complaint as it would have treated a complaint received before the end of the implementation period under CONRED 5.2.9R, except that any communication required to be sent in accordance with that rule must be sent within a period of 3 months beginning with the date the complaint is received; or
   2. (b) where the complaint relates to an agreement in relation to which an opt-in communication has been sent under CONRED 5.2.11R(2)(c), treat the complaint as an opt-in.
3. (3) Where (2)(a) applies, the requirement in CONRED 5.2.11R(2)(d) does not apply.
4. (4) Where a lender receives a complaint from a consumer relating to a motor finance agreement after the end of a period of 17 months beginning with the scheme effective date and the failure to comply with that time limit was caused by exceptional circumstance as set out in CONRED 5.4.41G, (2)(a) applies.

1. (1) Each of the following is a relevant arrangement unless at least one of the exceptions in (2) to (4) apply in respect of that arrangement:
   1. (a) a discretionary commission arrangement;
   2. (b) a high commission arrangement; or
   3. (c) a tied arrangement.
2. (2) A discretionary commission arrangement, a high commission arrangement, or a tied arrangement is not a relevant arrangement if:
   1. (a) the total amount of commission was £150 or less; or
   2. (b) the annual percentage rate for the motor finance agreement was 0%.
3. (3) A discretionary commission arrangement is not a relevant arrangement if the interest rate that applied under the motor finance agreement was the lowest rate of interest in the range of interest rates that could have been selected by the credit broker under the discretionary commission arrangement.
4. (4) A tied arrangement is not a relevant arrangement where the exception for captive and white label relationships described in CONRED 5.2.20R applies.
5. (5) For the purposes of (3), the lowest rate of interest in the range is the rate at which the credit broker would not receive commission in respect of the motor finance agreement because of the exercise of its discretion under the discretionary commission arrangement.
6. (6) The exceptions in (2) to (4) only apply where the lender can demonstrate the application of the exception on the basis of evidence (see also CONRED 5.2.24R and (with respect to the exception in (4)) CONRED 5.2.22R).
7. (7) If a lender has identified that an arrangement set out at (1)(a) to (c) is present in a scheme case but cannot demonstrate that one of the exceptions in (2) to (4) applies in respect of that arrangement, it must determine that the arrangement is a relevant arrangement.

1. (1) The exception referred to in CONRED 5.2.19R(4) applies where the motor finance agreement was entered into in the following circumstances:
   1. (a) the lender (L) was at the relevant time a captive lender of, or operating as a white label lender of, the manufacturer (M) of the motor vehicle acquired using the motor finance agreement;
   2. (b) the credit broker (C) that introduced the consumer to L was at the relevant time a franchised dealer of M; and
   3. (c) a trading name or branding commonly associated with the brand of the motor vehicle being acquired in the scheme case was clearly and prominently presented in:
      1. (i) a dedicated premises, or clearly segregated area of the premises, of C visited by the consumer;
      2. (ii) marketing materials or other communications relating to the motor finance agreement presented to the consumer prior to the consumer entering into the motor finance agreement; and
      3. (iii) the motor finance agreement.
2. (2) A captive lender of M means a lender that:
   1. (a) had the main business purpose of providing finance in connection with the acquisition of motor vehicles manufactured by M;
   2. (b) was a subsidiary undertaking of M; and
   3. (c) operated under one or more trading names commonly associated with those motor vehicles.
3. (3) A lender operating as a white label lender of M means a lender (other than a captive lender) that was party to an agreement with M under which it:
   1. (a) provided finance in connection with the acquisition of motor vehicles manufactured by M; and
   2. (b) operated under one or more trading names commonly associated with those motor vehicles when providing that finance.
4. (4) A franchised dealer of M means a credit broker that supplied one or more brands of vehicle manufactured by M using a trading name or other branding commonly associated with those motor vehicles and was either:
   1. (a) a subsidiary undertaking of M; or
   2. (b) operating pursuant to an agreement with M under which the credit broker was permitted to supply those vehicles using that trading name or other branding.
5. (5) Where the context requires, references to ‘the manufacturer’ or ‘M’ are to be read as including another undertaking in the same group as M.
6. (6) For the purposes of this rule (and CONRED 5.2.22R):
   1. (a) ‘acquired’ means through purchase or bailment (or in Scotland, hire), and references to ‘acquisition’ are to be read accordingly;
   2. (b) ‘premises’ means a dealer’s place of business including a motor vehicle forecourt;
   3. (c) ‘providing finance’ means providing credit under consumer credit agreements within the meaning of the CCA; and
   4. (d) ‘supply’ means:
      1. (i) selling or offering to sell; and
      2. (ii) bailment (or in Scotland, hiring);
      3. and references to ‘supplied’ or ‘supplier’ are to be read accordingly.

1. (1) To demonstrate that the exception in CONRED 5.2.19R(4) applies (see CONRED 5.2.19R(6)), the lender must have evidence that demonstrates that each of the conditions in CONRED 5.2.20R(1) are met.
2. (2) The lender may rely on the following to demonstrate that the conditions in CONRED 5.2.20R(1)(a) are met:
   1. (a) primary records; or
   2. (b) reasonable assumptions made by relying on secondary records.
3. (3) If the records in (2)(a) and (b) are not available, the lender may also rely on reasonable assumptions made by relying on primary or secondary records relating to a comparable credit broker.   
4. (4) To determine that the circumstances in CONRED 5.2.20R(1)(c) apply, the lender must identify evidence which:
   1. (a) demonstrates how the trading name or branding commonly associated with the brand of the motor vehicle being acquired in the scheme case was more likely than not presented to the consumer; and
   2. (b) relates to a period of time that is contemporaneous with the time the consumer entered into their motor finance agreement.
5. (5) For the purposes of (4), the lender may rely on:
   1. (a) primary records of the type described in CONRED 5 Annex 1.1G(3) which the lender has reasonable grounds to believe were presented to the consumer before the consumer entered the transaction; or
   2. (b) reasonable assumptions made by relying on secondary records which include information that demonstrates the disclosure, marketing and communication standards applied by the lender or the credit broker at the relevant time, together with evidence that compliance with those standards was monitored and enforced.
6. (6) If the records in (5)(a) and (b) are not available, the lender may rely on reasonable assumptions made by relying on secondary records relating to a comparable credit broker.
7. (7) A lender may only rely on secondary records if it can demonstrate that it is has taken reasonable steps to verify that the record relied on relates to a period of time that is contemporaneous with the time the consumer entered into their motor finance agreement.
8. (8) For the purposes of this rule, a credit broker (A) will only be comparable to the credit broker in the scheme case (B) where the lender has reasonable grounds to believe that at the relevant time A was, in carrying on its business, subject to:
   1. (a) the same or closely analogous terms of engagement or business with the lender and the vehicle manufacturer as B; and
   2. (b) the same or closely analogous disclosure, marketing and communication standards as B.

In relation to a motor finance agreement that ended on or after: 

1. (1) 11 January 2018 (and was entered into before 28 January 2021), lenders and credit brokers are expected to have retained records which confirm whether the agreement contained a discretionary commission arrangement pursuant to the record retention rule in DISP App 5.3.1R; and
2. (2) 20 December 2018, lenders and credit brokers are expected to have retained records which confirm whether the agreement contained all other relevant arrangements pursuant to the record retention rule in DISP App 5.3.1AR.

1. (1) Subject to (2), to identify whether a particular motor finance agreement is a scheme case or any relevant arrangements are present in respect of a scheme case, in accordance with CONRED 5.2.9R(2)(a) and (c) or CONRED 5.2.11R(2)(a) and (b), the lender must:
   1. (a) first consider the primary records of the type set out in CONRED 5 Annex 1.1G(1) and (2); and
   2. (b) where appropriate, consider whether reasonable assumptions can be made by relying on the secondary records.
2. (2) CONRED 5.2.22R applies for the purposes of identifying whether a tied arrangement is not a relevant arrangement because the exception for captive and white label relationships in CONRED 5.2.19R(4) applies.
3. (3) A lender may only rely on secondary records if it can demonstrate that it has taken reasonable steps to verify that the secondary record to be relied on relates to a period of time that is contemporaneous with the time the consumer entered into their motor finance agreement.

A credit broker, where it receives a request for information from a lender under CONRED 5.2.25R and CONRED 5.2.27R, must conduct a thorough search of its systems and respond to that request within the prescribed deadlines by either:

1. (1) complied with the rules and guidance in CONRED 5.2.13R, CONRED 5.2.23G and CONRED 5.2.24R;
2. (2) taken the steps set out in CONRED 5.2.25R to CONRED 5.2.27R; and
3. (3) failed to receive from a credit broker the necessary evidence to establish whether each of those conditions have been met.

1. (1) send a provisional redress decision in a durable medium containing the information set out in CONRED 5 Annex 9.1R to inform the consumer of the following:
   1. (a) its conclusion;
   2. (b) the reasons for its conclusion; and
   3. (c) on that basis, that there will be no redress payable under the scheme; and
2. (2) give the consumer at least 1 month to respond to that provisional redress decision and provide any relevant records and information.

1. (1) there is or was an unfair relationship under the unfair relationship provisions arising out of a failure to provide adequate disclosure of one or more of the relevant arrangements (stage 1); and
2. (2) the consumer suffered loss or damage as a result (stage 2).

1. (1) any more relevant arrangements are present in respect of the scheme case; and  

2. (2) it has the necessary records and information to determine whether there was an unfair relationship that caused loss or damage to the consumer in accordance with the rules in this section (i.e. the third step). 

    

1. (1) To identify whether any of the relevant arrangements are present in accordance with CONRED 5.3.2R(1), the lender must apply the rules and guidance in CONRED 5.2.19R to CONRED 5.2.24R in so far as those rules relate to identifying whether a relevant arrangement is present in a scheme case.
2. (2) To identify whether the lender has the necessary records and information to make the determination required under the third step in accordance with CONRED 5.3.2R(2) the lender must consider in particular the types of records set out in CONRED 5.3.12R (approach to evidence when assessing the adequacy of disclosure). 

If a credit broker receives a request for information from a lender under CONRED 5.3.4R or CONRED 5.3.5R, it must conduct a thorough search of its systems and respond to that request within 1 month by either:

1. (1) providing the requested information in the format requested or, if that is not reasonably practicable, a reasonable format; or
2. (2) confirming that it does not hold the requested information.

1. (1) one or more of the relevant arrangements are present; and

2. (2) there was a failure to provide adequate disclosure to the consumer of any of those arrangements that were present.

    

1. (1) the rules on assessing adequate disclosure in CONRED 5.3.10R and CONRED 5.3.12R; and

2. (2) section 56 of the CCA (see CONRED 5.3.13G).

    

1. (1) There will not have been adequate disclosure of a relevant arrangement unless the following information (the ‘disclosure information’) was clearly and prominently provided to the consumer before the consumer entered into the motor finance agreement:
   1. (a) in relation to a discretionary commission arrangement – the fact that commission was payable to the credit broker in respect of the consumer’s agreement and sufficient information about the discretionary commission arrangement for the consumer to understand that the credit broker was permitted to select the interest rate provided for under the motor finance agreement in a way that affected the amount of commission that would be received by the credit broker;
   2. (b) in relation to a high commission arrangement – the fact and amount of the commission payable to the credit broker in respect of the consumer’s agreement, either by the disclosure of the amount of commission in monetary terms or by the disclosure of the method by which the commission amount would be calculated such that the consumer was able to understand its size;
   3. (c) in relation to a tied arrangement – the fact of the tied arrangement and sufficient information about the arrangement for the consumer to understand that the credit broker would introduce consumers exclusively to the lender or give the lender the option to provide an offer of credit to the consumer before the credit broker approached any other lender (as relevant).
2. (2) The disclosure information will not have been clearly and prominently provided unless it was presented, in relation to the other information provided at the same time, in such a way that it (subject to (3) and (4)) was likely to have drawn the attention of the average customer to whom it was directed.
3. (3) The lender may base its assessment of whether there was adequate disclosure for the purposes of (1) on whether the disclosure was likely to have been adequate for the average consumer to whom the relevant communication was directed unless there is evidence in the records relating to the scheme case that:
   1. (a) the consumer had characteristics which would have impaired the consumer’s ability to meaningfully understand the information; and
   2. (b) those characteristics would at the time have been apparent to the person making the communication.
4. (4) Where the circumstances in (3)(a) and (b) apply, the lender should further consider whether any additional information, further explanation or a different communication channel would have been required to meet the information needs of that consumer for the disclosure to have been adequate.

1. (1) Examples that would tend to indicate that the disclosure information in CONRED 5.3.10R(1) is likely to have been presented clearly and prominently for the purposes of CONRED 5.3.10R(2) include the following (subject to CONRED 5.3.10R(3) to (4)):
   1. (a) there is evidence that an oral communication was used to draw the consumer’s attention to the information in written form;
   2. (b) that information was presented as a key term or item of information at the top of a key document, or presented as such in a separate short summary document;
   3. (c) that information was specifically drawn to the consumer’s attention by bold text or similar visual means; or
   4. (d) the consumer was asked to specifically acknowledge that they had been given that information (for example, by signing a declaration to that effect).
2. (2) Examples that would tend to indicate that the disclosure information in CONRED 5.3.10R(1) is unlikely to have been presented clearly and prominently for the purposes of CONRED 5.3.10R(2) include where its importance was obscured or diminished by:
   1. (a) being surrounded by a significant volume of other terms or information, with no particular attention drawn to it; or
   2. (b) the use of small font sizes.

1. (1) This rule sets out the lender’s approach to evidence when assessing whether there was adequate disclosure of the disclosure information.
2. (2) The lender must presume that there was no adequate disclosure unless one of the conditions in (3) or (4) is met.
3. (3) The first condition referred to in (2) is that:
   1. (a) one (or more) of the primary records of the type listed in CONRED 5 Annex 1.1G(3) contains the disclosure information; and
   2. (b) either:
      1. (i) there is evidence that the disclosure information contained in that record (or records) was provided to the consumer prior to the consumer entering into the motor finance agreement; or
      2. (ii) the lender has reasonable grounds to believe that the consumer was made aware of the disclosure information contained in that record (or records) prior to that consumer entering into the motor finance agreement.
4. (4) The second condition referred to in (2) is that there are relevant secondary records which demonstrate that the disclosure information was more likely than not provided to the consumer before the consumer entered into the motor finance agreement.
5. (5) For the purposes of this rule, ‘relevant secondary record’ means:
   1. (a) records (of the type described in CONRED 5 Annex 1.1G(4) (such as template disclosure materials or other records)) which clearly set out the policy of the lender or the credit broker to include information that would constitute adequate disclosure in the information provided to consumers at the relevant time; or
   2. (b) contemporaneous records of the type described in CONRED 5 Annex 1.1G(3) relating to other consumers who were in a sufficiently similar position as the consumer in the scheme case, and which include information that demonstrates the standard disclosure practice of the lender or the credit broker at the relevant time.
6. (6) A lender may only rely on a relevant secondary record if it can demonstrate that it has taken reasonable steps to verify that the record relates to a period of time that is contemporaneous with the time the consumer entered into their motor finance agreement.

1. (1) A presumption of an unfair relationship arising out of a failure to provide adequate disclosure of a relevant arrangement is rebuttable by the lender where it can be demonstrated on the basis of evidence that it is more likely than not that the particular consumer could reasonably be expected to have known about or foreseen the disclosure information about the relevant arrangement because of:
   1. (a) their level of specific knowledge or experience (for example, from working in a relevant role within a vehicle dealership or the motor finance industry); or
   2. (b) prior transactions with the lender or credit broker involving adequate disclosure of the relevant arrangements.
2. (2) A presumption of an unfair relationship arising out of a failure to provide adequate disclosure of a tied arrangement is rebuttable by the lender where it can be demonstrated on the basis of evidence that it is more likely than not that the constraints imposed by the tied arrangement in the scheme case did not impact on the credit broker’s decision to introduce the consumer to the lender because, at the relevant time:
   1. (a) the lender had expressly, or by implication through the course of dealing between the parties, agreed to forgo any reliance on the tied arrangement; or   
   2. (b) the broker had a policy or practice of disregarding the tied arrangement when introducing consumers to lenders.

1. (1) evidence which demonstrates that, at the relevant time, the credit broker was introducing consumers to lenders in a way that was incompatible with a scenario in which the tied arrangement had an impact on the decision making of the credit broker (see CONRED 5.3.17R); and
2. (2) verification of the reliance on that evidence in accordance with CONRED 5.3.18R.

1. (1) In addition to the evidence of the type described in CONRED 5.3.17R, the lender must obtain a report from:
   1. (a) the individual who has responsibility for the management of the internal audit function of the firm; or
   2. (b) an independent auditor.
2. (2) The report must include:
   1. (a) an explanation of the evidence being relied upon by the firm to demonstrate the rebuttal;
   2. (b) a statement of the role and responsibilities of the person providing the report; and
   3. (c) an attestation from that person confirming that they have:
      1. (i) reviewed and assessed the evidence relied on by the firm to demonstrate the rebuttal; and
      2. (ii) concluded that the evidence demonstrates that the conditions for relying on the rebuttal are met.
3. (3) A report produced pursuant to this rule may apply to a group of scheme cases provided the requirements of this rule are satisfied in respect of each scheme case to which the report relates.

1. (1) If the lender determines that there was an unfair relationship in accordance with CONRED 5.3.19R, the lender must proceed to CONRED 5.3.21R (Stage 2: loss or damage assessment – presumption of loss or damage).
2. (2) If the lender determines there was not an unfair relationship because there was adequate disclosure or the presumption of an unfair relationship was rebutted, the lender must:
   1. (a) inform the consumer of that determination and the reasons for it in a provisional redress decision that:
      1. (i) contains the information set out in CONRED 5 Annex 2; and
      2. (ii) is sent in a durable medium; and
   2. (b) provide the consumer with 1 month to respond.

1. (1) The presumption of loss or damage in CONRED 5.3.21R is rebuttable by the lender if it can demonstrate on the basis of evidence that it is more likely than not that the consumer would not, in relation to the same transaction, have been able to obtain a lower annual percentage rate from another lender with which the credit broker had a referral arrangement, at the relevant time.   
2. (2) The rebuttal in this rule only applies where, at the relevant time:     
   1. (a) the credit broker had referral arrangements with one or more lender, other than the lender in the scheme case (for example, where the credit broker had access to a ‘panel’ of other lenders as an alternative to the right of first refusal arrangement it had with the lender); and
   2. (b) those lenders offered motor finance agreements that would have been available to, and suitable for the needs of, the consumer in the scheme case (considering the consumer’s credit profile and the characteristics of the credit product sought).
3. (3) Reliance on the rebuttal in this rule must be supported by evidence which demonstrates:
   1. (a) the alternative annual percentage rates that would, at the relevant time, have been available to the consumer from each lender with which the credit broker had referral arrangements; or
   2. (b) that the credit broker’s internal processes at the relevant time involved carrying out checks which ensured that the consumer could not have received a lower annual percentage rate from any other lender with which the credit broker had a referral arrangement.
4. (4) The rebuttal in this rule cannot be relied upon in scheme cases where the lender has determined that there was an unfair relationship arising out of a discretionary commission arrangement.
5. (5) For the purposes of this rule, and CONRED 5.3.23R, ‘referral arrangement’ means an arrangement between a lender and a credit broker relating to the introduction of consumers wishing to enter into motor finance agreements with that lender.

1. (1) The following evidence is likely to be required to demonstrate CONRED 5.3.22R(3)(a):
   1. (a) contemporaneous broker platform screenshots or other records showing the application of the consumer in the scheme case and the range of rates that were available to that consumer;
   2. (b) contemporaneous communications (for example, emails or system notes) confirming the annual percentage rates considered by the credit broker in respect of the consumer in the scheme case; or
   3. (c) a combination of the following:
      1. (i) contemporaneous records that:
         1. (A) show the annual percentage rates available from the lenders with which the credit broker had arrangements at the relevant time; and
         2. (B) provide sufficient information, taking into account different credit profiles, credit amounts and product types, to allow the available rates to be matched to the consumer in the scheme case; and
      2. (ii) sufficient transaction data:
         1. (A) to demonstrate the annual percentage rates that were provided to consumers in a sufficiently similar position to the consumer in the scheme case (ie, consumers with a similar credit profile, credit amount and product type) by those lenders; and
         2. (B) from which reasonable assumptions about the rates available to the consumer in the scheme case can be made.
2. (2) The following evidence is likely to be required to demonstrate CONRED 5.3.22R(3)(b):
   1. (a) contemporaneous records of the credit broker’s internal systems, controls, processes, policies, procedures or other documents which set out the credit broker’s approach to the introduction of consumers to lenders at the relevant time; and
   2. (b) a statement from an individual of appropriate seniority in the credit broker attesting that:
      1. (i) the records referred to in (a) accurately reflect the credit broker’s internal processes the relevant time; and
      2. (ii) those processes ensured that the consumer could not have obtained a lower annual percentage rate from another lender with which the credit broker had referral arrangements at the relevant time.

1. (1) If the lender determines that the unfair relationship caused loss or damage to the consumer, the lender must proceed to the fourth step in CONRED 5.4.
2. (2) If the lender determines that the unfair relationship did not cause loss or damage to the consumer (because the presumption was rebutted in accordance with CONRED 5.3.22R), the lender must:
   1. (a) inform the consumer of that determination and the reasons for it in a provisional redress decision sent in a durable medium that contains the information set out in CONRED 5 Annex 2; and
   2. (b) provide the consumer with 1 month to respond.

1. (1) This rule applies where a lender has sent a provisional redress decision under:
   1. (a) CONRED 5.3.20R(2); or
   2. (b) CONRED 5.3.26R(2).
2. (2) If the consumer responds to the provisional redress decision within 1 month stating that they do not wish to have their case considered under this scheme, the lender must, within a 7-day period beginning on the day the response is received, send the consumer a communication to:
   1. (a) acknowledge the response; and
   2. (b) explain that the complaint will not be dealt with any further.
3. (3) If the consumer responds to the provisional redress decision within 1 month stating that they accept the decision, the lender must, within a 7-day period beginning on the day the response is received, send the consumer a communication acknowledging the acceptance.
4. (4) If a consumer responds to the provisional redress decisions within 1 month objecting to the decision, the lender must:
   1. (a) send an acknowledgment containing the information set out in CONRED 5 Annex 10.1R within 7 days, requiring the consumer to provide further details of the objection, including any evidence supporting the objection, within 1 month of the date of the acknowledgement;
   2. (b) decide whether it should proceed to stage 2 of the third step in respect of cases relating to (1)(a) and the fourth step in respect of cases relating to (1)(b) on the basis of the objection, including any representations and any supporting evidence from the consumer; and
   3. (c) undertake one of the actions set out in (5) within 2 months of:
      1. (i) the day it receives the further details of the objection; or
      2. (ii) where the lender receives no further details within 1 month of the date of the acknowledgement in accordance with (a), the date of the expiry of that 1 month period.
5. (5) The actions in (4)(c) are:
   1. (a) send a redress determination confirming the provisional redress decision and containing the information in CONRED 5 Annex 3; or
   2. (b) complete the remaining steps under this chapter necessary to provide the consumer with their next provisional redress decision or redress determination.
6. (6) Where the lender accepts the consumer’s objection, provided in accordance with (4), it must proceed to the next stage or step.
7. (7) Where the consumer does not respond to the provisional redress decision referred to in (1) within 1 month, the lender must send a redress determination confirming the provisional redress decision in the form set out in CONRED 5 Annex 3 within 1 month of the expiry of that period.
8. (8) Any communication sent by a lender under this rule must be sent in a durable medium.

1. (1) Where a lender has determined that, in relation to a scheme case, there was an unfair relationship under CONRED 5.3 and the consumer has suffered loss or damage as a result, the lender must calculate the amount of redress payable in accordance with CONRED 5.4.3R to CONRED 5.4.35R.
2. (2) Where there was a failure to provide adequate disclosure of a high commission arrangement together with a tied arrangement or a discretionary commission arrangement or both, the lender must determine whether there was a very high commission arrangement, and, if so, calculate redress in accordance with the commission repayment remedy (CONRED 5.4.4R).  
3. (3) In all other cases, except where CONRED 5.4.6R applies, the lender must calculate redress in accordance with the hybrid remedy CONRED 5.4.15R to 5.4.16R and calculate and, where required, apply the caps in CONRED 5.4.19R to 5.4.21R.
4. (4) CONRED 5.4.6R applies to a scheme case under the hybrid remedy, where the consumer paid a minimal cost of credit, offered to 5% of the market at the time (excluding 0% APR agreements). In such cases, no redress is payable.  

1. (1) The commission repayment remedy applies where the lender has determined in accordance with CONRED 5.3 that there was an unfair relationship causing loss or damage arising from a failure to provide adequate disclosure of;
   1. (a) a high commission arrangement that was also a very high commission arrangement; and
   2. (b) either or both of:
      1. (i) a tied arrangement;
      2. (ii) a discretionary commission arrangement.
2. (2) The lender must calculate the commission repayment remedy in accordance with CONRED 5.4.4R.

1. (1) The amount of redress payable to the consumer under the commission repayment remedy is the sum of A and B where:
   1. (a) ‘A’ is the total amount of commission payable; and
   2. (b) ‘B’ is compensatory interest on that amount, calculated using the approach in CONRED 5.4.34R, applied from the date the consumer entered into the motor finance agreement until the date of redress payment.
2. (2) For the purpose of calculating compensatory interest for the provisional redress decision and the redress determination, the ‘date of redress payment’ is the date the relevant communication is sent.  

1. (1) The hybrid remedy applies in all scheme cases where the lender has determined in accordance with CONRED 5.3 that there was an unfair relationship causing loss or damage, other than where the commission repayment remedy applies (CONRED 5.4.3R).
2. (2) Except where CONRED 5.4.6 applies, for each scheme case, the lender must:
   1. (a) calculate the commission repayment remedy in accordance with CONRED 5.4.4R;
   2. (b) calculate the total APR adjustment in accordance with CONRED 5.4.8R to CONRED 5.4.14R;
   3. (c) apply the amounts calculated under (a) and (b) to the hybrid formula in accordance with CONRED 5.4.16R;
   4. (d)calculate the adjusted commission plus interest cap, the adjusted realised cost of credit cap, and, where applicable, the total realised cost of credit cap in accordance with CONRED 5.4.19R to CONRED 5.4.21R; and
   5. (e) apply the caps where necessary to determine the amount of redress payable to the consumer under the hybrid remedy in accordance with CONRED 5.4.22R.

1. (1) Where the annual percentage rate of charge paid by the consumer is less than or equal to the 5th percentile annual percentage rate of charge for the year in which the motor finance agreement was executed, as set out in the table in CONRED 5.4.7R, the lender must assess the amount of redress payable to the consumer as £0.
2. (2) Where (1) applies, the lender must:
   1. (a) inform the consumer of the assessment in (1) and reasons for it in a provisional redress decision in a durable medium that contains the information in CONRED 5 Annex 2;
   2. (b) provide the consumer with 1 month to respond to the communication in (a); and
   3. (c) consider any response to the provisional redress decision in accordance with CONRED 5.4.37R. 

1. (1) Stage 1: the lender must first determine the market adjusted APR for the motor finance agreement.
2. (2) The market adjusted APR is the annual percentage rate of charge paid by the consumer under the motor finance agreement with the lender multiplied by 0.83.

3. (3) Where the motor finance agreement includes a discretionary commission arrangement and the lowest rate of interest in the range of interest rates that could have been selected by the credit broker is higher than the figure calculated in (2), the lowest rate of interest should be used instead of the market adjusted APR.

    

1. (1) Stage 2: the lender must create a schedule of the consumer’s payments under the motor finance agreement.
2. (2) Where all actual payment dates and payment amounts are available and the consumer made early settlement payment(s) or partial early settlement payment(s) the lender must recreate the schedule of actual payments, using the annual percentage rate of charge under the motor finance agreement (‘option 1’).
3. (3) Where option 1 does not apply, the lender must create a schedule using the payment dates and payment amounts contractually agreed under the terms of the motor finance agreement (‘option 2’) where this is possible.
4. (4) Where option 1 does not apply and it is not possible to create a schedule under option 2, the lender must create an equivalent schedule by applying the amortisation formula at (5), using the annual percentage rate of charge under the motor finance agreement, and assume, when applying this formula, that the motor finance agreement ran for the agreed term and the lender and consumer fulfilled their obligations under the terms of that agreement (‘option 3’).
5. (5) The amortisation formula is:

6. M = (P × r) / (1 – (1 + r) ^-n)

7. where:   
   1. (a) M = monthly payment;
   2. (b) P = principal (amount borrowed);
   3. (c) r = monthly interest rate (which is the annual percentage rate of charge paid by the consumer under the motor finance agreement divided by 12); and
   4. (d) n = total number of monthly payments (term in months).
8. (6) Where in (3) and (4) (options 2 and 3) there is information to suggest that the consumer made early settlement payment(s) under the motor finance agreement, the lender must calculate these using the formula in regulation 4 of the Consumer Credit (Early Settlement) Regulations 2004 and replace any monthly payments with the early settlement payment(s).

1. (1) Stage 3: the lender must create a schedule of the consumer’s market adjusted payments.
2. (2) Where CONRED 5.4.10R(2) or (3) apply (options 1 or 2), the lender must calculate all market adjusted payments, including any early settlement payments, by substituting the annual percentage rate of charge under the motor finance agreement with the market adjusted APR calculated in accordance with CONRED 5.4.9R.
3. (3) Where CONRED 5.4.10R(4) applies (option 3), the lender must calculate all market adjusted payments using the amortisation formula in CONRED 5.4.10R(5), where r equals the market adjusted APR calculated in CONRED 5.4.9R, divided by 12. The lender must also calculate any early settlement payment(s) by substituting the annual percentage rate of charge with the market adjusted APR.

1. (1) Stage 4: the lender must create a schedule of payment differentials using the formula:
2.                                                    A - B
3. where:
   1. (a) ‘A’ is the consumer’s payments under the motor finance agreement calculated in accordance with CONRED 5.4.10R; and
   2. (b) ‘B’ is the corresponding market adjusted payments calculated in accordance with CONRED 5.4.11R.
4. (2) Where option 1 in CONRED 5.4.10R(2) applies and the formula at (1) would produce a negative figure, the lender must adopt the actual payment made under the motor finance agreement as the market adjusted payment and set the payment differential to £0 in the schedule.

1. (1) Stage 5: the lender must calculate the amount of compensatory interest payable on the payment differentials set out in the schedule created under CONRED 5.4.12R.
2. (2) Compensatory interest payments are calculated in accordance with CONRED 5.4.34R.
3. (3) For the purpose of calculating compensatory interest for the provisional redress decision and redress determination, the ‘date of redress payment’ is the date the relevant communication is sent.

1. (1) all payment differentials in the schedule created in accordance with CONRED 5.4.12R; and
2. (2) all compensatory interest payments on those payment differentials calculated in accordance with CONRED 5.4.13R.

1. (1) ‘C’ is the amount calculated in accordance with CONRED 5.4.4R (the commission repayment remedy).
2. (2) ‘D’ is the amount calculated in accordance with CONRED 5.4.14R (the total APR adjustment).

1. (1) Stage 1 – adopt the schedule of the consumer’s payments under the motor finance agreement created in CONRED 5.4.10R.
2. (2) Stage 2 – create a separate ‘5th percentile’ schedule by:   
   1. (a) substituting the annual percentage rate of charge in the consumer’s payment schedule (stage 1) with the 5th percentile annual rate of charge set out in the table at CONRED 5.4.7R for the year in which the motor finance agreement was executed; and
   2. (b) recalculating each payment made under the agreement using that rate.
3. (3) Stage 3 – create a schedule of payment differentials using the formula:
4.                                                      A - E
5. where:
   1. (a) ‘A’ is the consumer’s payments under the motor finance agreement (stage 1); and
   2. (b) ‘E’ is the corresponding 5th percentile annual rate of charge payments calculated at stage 2.
6. (4) Stage 4 – calculate compensatory interest on the payment differentials in the schedule created at stage 3 in accordance with CONRED 5.4.34R(2)(b) and (3) to (5).
7. (5) Stage 5 – calculate the adjusted realised cost of credit cap, which is the sum of all payment differentials calculated at stage 3 and all compensatory interest payments on those payment differentials calculated at stage 4.

1. (1) Where the lender can identify the total value of all payments made by the consumer under the motor finance agreement, the lender must also calculate the total realised cost of credit cap.
2. (2) The total realised cost of credit cap is the sum of A and B, where:
   1. (a) ‘A’ is the total value of all actual payments made by the consumer under the motor finance agreement minus the total amount of credit; and
   2. (b) ‘B’ is compensatory interest on that amount calculated using the interest rate formula in CONRED 5.4.34R(2)(a) and (3) to (5), applied from the date the consumer entered into the motor finance agreement until the date of the redress payment. 

1. (1) the amount calculated under the hybrid formula in CONRED 5.4.16R; or
2. (2) where the amount at (1) exceeds the value of any of the caps calculated in CONRED 5.4.19R to CONRED 5.4.21R, the lowest amount calculated under any of these caps.  

1. (1) This rule applies where, in a scheme case, a single motor vehicle sales transaction was financed by more than one motor finance agreement.
2. (2) The lender must calculate the total amount of commission and assess whether the definition of a very high commission arrangement is met in accordance with CONRED 5.1.5R(4)(a) and (4)(b).
3. (3) The commission repayment remedy applies where the lender has determined that, in relation to the scheme case, there was an unfair relationship causing loss or damage arising from a failure to provide adequate disclosure of:
   1. (a) a high commission arrangement that was also a very high commission arrangement, assessed in accordance with (2); and
   2. (b) either or both of:
      1. (i) a tied arrangement;
      2. (ii) a discretionary commission arrangement.
4. (4) (a) Where (3) applies, the lender must calculate the commission repayment remedy in accordance with CONRED 5.4.4R for each motor finance agreement.
   1. (b) The total redress is the sum of the amounts calculated in (a).
5. (5) In all other cases, the hybrid remedy applies, and the lender must calculate:
   1. (a) (i) the commission repayment remedy in accordance with (4) and the total APR adjustment in accordance with CONRED 5.4.9R to CONRED 5.4.14R, for each motor finance agreement; and
      1. (ii) redress under the hybrid remedy, by applying the amounts in (i) to the hybrid formula in CONRED 5.4.16R for each motor finance agreement and then calculating the sum of these amounts;
   2. (b) the adjusted commission plus interest cap in accordance with CONRED 5.4.19R, for each motor finance agreement and then the sum of these amounts;
   3. (c) the adjusted realised cost of credit cap in accordance with CONRED 5.4.20R for each motor finance agreement and then the sum of these amounts;
   4. (d) the total realised cost of credit cap in accordance with CONRED 5.4.21R, where this can be calculated for all motor finance agreements, and then the sum of these amounts.
6. (6) The total redress payable is the lowest amount calculated under (5)(a)(ii) to (d).
7. (7) When calculating the commission repayment remedy in (4) and the adjusted commission plus interest cap in (5)(b), where the total amount of commission payable in relation to any agreement involved in the transaction is not known, the lender must divide the total amount of commission calculated in accordance with (2) by the number of agreements involved in the transaction, and then apportion these equal amounts to each motor finance agreement involved in the transaction.
8. (8) Where the hybrid remedy applies to a scheme case and the annual percentage rate of charge under an agreement involved in the transaction is less than or equal to the minimal annual percentage rate of charge set out in the table at CONRED 5.4.7R, the lender must assess the amount of redress for that agreement as £0 and include this in the sum in (5)(a)(ii).

1. (1) The lender may set-off redress against any undisputed arrears or default sums owed by the consumer to the lender in relation to the motor finance agreement where:
   1. (a) an offer is made to the consumer in accordance with CONRED 5.2.7R; or
   2. (b) redress is payable under either the commission repayment remedy (CONRED 5.4.4R) or the hybrid remedy (CONRED 5.4.22R).
2. (2) Where a single motor vehicle sales transaction is financed by more than one motor finance agreement, the lender may-set off redress against one or more of the agreements relating to the transaction where there are undisputed arrears or default sums owed by the consumer under that agreement.

1. (1) In order to calculate redress in accordance with CONRED 5.4, the lender must:
   1. (a) first, consider information and data contained in primary records of the type set out in CONRED 5 Annex 1.1G(1) and (3); and
   2. (b) then, where appropriate, consider whether reasonable assumptions can be made regarding the consumer’s motor finance agreement by relying on contemporaneous records of the type described in CONRED 5 Annex 1.1G(4).
2. (2) Where the lender does not have the necessary records, it must request these from the relevant credit broker.

1. (1) contact the consumer and/or an appropriate third party such as a credit reference agency to provide some or all of the missing information and then rely on the approach to reconstructing missing information in CONRED 5.4.31R where the information has not been obtained; or
2. (2) rely on the approach to reconstructing missing information in CONRED 5.4.31R, without first taking the steps in (1).

1. (1) Where appropriate, the lender must reconstruct missing data using contemporaneous records of the type described in CONRED 5 Annex 1.1G(1), (3) and (4) relating to other consumers.
2. (2) The other consumers referenced in (1) must have been in the same or sufficiently similar position as the consumer in the scheme case and would have received an annual percentage rate of charge which was the same or sufficiently similar to the annual percentage rate of charge that the consumer in the scheme case received.
3. (3) The lender’s determination must take into account:
   1. (a) the year of the transaction;
   2. (b) the type and value of the vehicle purchased, bailed or hired;
   3. (c) the amount of credit obtained; and
   4. (d) the cost of that credit relative to the value of the vehicle.

1. (1) Where the annual percentage rate of charge is missing, the lender must use:
   1. (a) the median of the annual percentage rates of charge under all motor finance agreements entered into by the lender following an introduction effected by the relevant credit broker in the financial year the motor finance agreement was entered into; or
   2. (b) where (a) is not available, an annual percentage rate of charge which is the median annual percentage rate of charge under all motor finance agreements from a credit broker to whom the lender offered the same or sufficiently similar terms of engagement or business for the financial year in which the motor finance agreement was entered into.
2. (2) Where the commission amount is missing, the lender must use:
   1. (a) a commission amount which is the median of the commission amounts under all motor finance agreements entered into by the lender following an introduction effected by the relevant credit broker in the financial year the motor finance agreement was entered into; or
   2. (b) where (a) is not available, a commission amount which is the median annual commission amount under all motor finance agreements from a credit broker to whom the lender offered the same or sufficiently similar terms of engagement or business for the financial year in which the motor finance agreement was entered into.
3. (3) Where the total amount of credit is missing, the lender must:
   1. (a) adopt a value using a motor valuation guide such as AutoTrader, CAP, Percayso and Glass’s for the relevant motor vehicle and the relevant year, deducting 10% to reflect a typical deposit payment; or
   2. (b) where the relevant year is not available in the motor valuation guides in (a):
      1. (i)  contact either a relevant third party such as a credit reference agency or take all reasonable steps to contact the consumer to obtain this information; or
      2. (ii) contact both a relevant third party and the consumer where enquiries under (i) have not resulted in the lender obtaining the total amount of credit; and
   3. (c) where the lender has not managed to obtain the information as a result of enquiries in (a) or (b), use a motor valuation guide of the type specified in (a) to adopt a value for the relevant motor vehicle based on the closest year the lender can obtain a valuation for at the point at which the consumer entered into the motor finance agreement, deducting 10% to reflect a typical deposit payment.
4. (4) Where the start date or execution date for the motor finance agreement is missing, the lender must use:
   1. (a) the first day of the month in which the lender has evidence of the consumer first making a payment or charges applying under the motor finance agreement; or
   2. (b) if there is no evidence of the first payment or initial charges, the day ‘X’ months before the date the last regular payment was due under the agreement, where ‘X’ is the term of the agreement in months; or
   3. (c) where it is not possible to determine the start date or execution date in accordance with (a) or (b):
      1. (i) for new motor vehicles, the first day of the time period associated with the vehicle’s registration, namely:
         1. (A) 1 March for vehicles registered between 1 March and 31 August; and
         2. (B) 1 September for vehicles registered between 1 September and the last day of February; or
      2. (ii) for used or second-hand motor vehicles, any information that indicates when the credit broker acquired the motor vehicle, such as date of purchase; or
      3. (iii) where it is not possible to determine the start date or execution date in accordance with (i) or (ii), 48 months prior to the date the last regular payment was due under the agreement.
5. (5) Where the date the last regular payment was due under the motor finance agreement or the date by which any fee associated with taking ownership must be paid is missing, the later of:
   1. (a) the last day of the month in which the lender has evidence of the consumer making a final payment or final charges applying under the agreement; and
   2. (b) the day 48 months after the start date or the date the agreement was executed.
6. (6) Where the actual end date of the motor finance agreement is not available, the lender must use:
   1. (a) the last day of the month in which the lender has evidence of the consumer making a final payment or final charges applying under the agreement;
   2. (b) if there is no evidence of the final payment or final charges, the day ‘X’ months after the start date or the date the agreement was executed, where ‘X’ is the term of the agreement in months;
   3. (c) if it is not possible to determine the end date in accordance with (a) or (b), the day 48 months after the start date or the date the agreement was executed.
7. (7) Where the lowest rate of interest in the range of interest rates under the discretionary commission arrangement is not available, the lender must adopt:
   1. (a) the actual annual percentage rate of charge multiplied by 0.83; or
   2. (b) (i) the median of the minimum rates under all motor finance agreements entered into by the lender following an introduction effected by the relevant credit broker in the financial year the motor finance agreement was executed; or
      1. (ii) where (i) is not possible, the median of the minimum rates under all motor finance agreements from a credit broker to whom the lender offered the same or sufficiently similar terms of engagement or business for the financial year in which the motor finance agreement was executed.
8. (8) Where necessary information to calculate early settlement payment(s) is not available, the lender must assume that the motor finance agreement remained valid for the agreed term, and the lender and consumer fulfilled their obligations under the terms and by the dates specified in that agreement.

1. (1) This rule sets out how the lender must calculate compensatory interest as part of the commission repayment remedy in CONRED 5.4.4R, the total APR adjustment in CONRED in 5.4.14R, the adjusted realised cost of credit cap in CONRED 5.4.20R and the total realised cost of credit cap in CONRED 5.4.21R.
2. (2) (a) In relation to the commission repayment remedy and the total realised cost of credit cap, the lender must divide the period from the date the consumer entered into the motor finance agreement until the date of redress payment into calendar year segments.
   1. (b) In relation to the total APR adjustment calculations and the adjusted realised cost of credit cap, the lender must:
      1. (i)  for each payment differential in the schedule in CONRED 5.4.12R and CONRED 5.4.20R(3), identify the date the payment differential occurred and the date of redress payment to create a list of interest periods; and
      2. (ii) divide each interest period in (i) into calendar year segments.
3. (3) For each calendar year segment, the lender must:
   1. (a) identify the compensatory interest rate from the table in CONRED 5.4.35R that applies to that year;
   2. (b) calculate the number of days for which that rate applies in that calendar year; and
   3. (c) apply the formula in (4).

(4) The formula is:

1. 

2. (* if the calendar year is a leap year, the denominator is 366)
3. where:
   1. (a) the principal is either:
      1. (i) the total amount of commission payable, when calculating interest in relation to the commission repayment remedy; or
      2. (ii) the total realised cost of credit calculated in accordance with CONRED 5.4.21R, when calculating interest in relation to the total realised cost of credit cap; or
      3. (iii) each payment differential set out in the schedule produced in accordance with CONRED 5.4.12R, when calculating interest in relation to the total APR adjustment; or
      4. (iv) each payment differential set out in the schedule produced in accordance with CONRED 5.4.20R(3) when calculating interest in relation to the adjusted realised cost of credit cap; and
   2. (b) compensatory interest rate is the rate that applies for that calendar year as set out in the table in CONRED 5.4.35R.
4. (5) The lender must sum the interest amounts for all calendar year segments to calculate the total compensatory interest.

1. (1) This rule applies where a lender has:
   1. (a) calculated the amount of redress payable to the consumer under CONRED 5.4.4R (the commission repayment remedy) or CONRED 5.4.22R (the hybrid remedy); and
   2. (b) where relevant, set-off any undisputed arrears or defaults against that redress amount in accordance with CONRED 5.4.24R.
2. (2) The lender must send the consumer a provisional redress decision in a durable medium that contains the information in CONRED 5 Annex 2 and includes:
   1. (a) the basis for the lender’s determination that there was an unfair relationship that caused loss or damage;
   2. (b) the total amount of redress payable to the consumer as an offer in full and final settlement of all claims against the lender within the subject matter of the scheme relating to the agreement;
   3. (c) details of the calculations the lender made under CONRED 5.4.3R to CONRED 5.4.34R to determine the total amount of redress, clearly setting out the methodology used, any evidential assumptions and reconstructions relied on, the amount of compensatory interest included in these calculations and any proposed set-off for undisputed arrears or default sums; and
   4. (d) that the consumer has 1 month from the date of the provisional redress decision to respond.

1. (1) This rule applies where a lender has sent a provisional redress decision under CONRED 5.2.7R(1), CONRED 5.4.6R or CONRED 5.4.36R.
2. (2) Where the consumer responds to the provisional redress decision within 1 month stating that they do not wish to have their case considered under this scheme, the lender must, within a 7-day period beginning on the day the response is received, send the consumer a communication in a durable medium to:
   1. (a) acknowledge the response; and
   2. (b) explain that the complaint will not be dealt with any further.
3. (3) Where the consumer responds to the provisional redress decision within 1 month stating that they accept the decision in full and final settlement, the lender must, within a 7-day period beginning on the day the response is received, send the consumer a communication acknowledging the acceptance.
4. (4) Where a consumer responds to the provisional redress decision within 1 month objecting to the decision, the lender must:
   1. (a) send an acknowledgment containing the information in CONRED 5 Annex 10.1R within 7 days, requiring the consumer to provide further details of the objection, including any evidence supporting the objection, within 1 month of the date of the acknowledgement;
   2. (b) decide whether it should revise the provisional redress decision and recalculate the amount of redress payable based on the consumer’s objection and any supporting evidence; and
   3. (c) undertake one of the actions set out in (5) within 2 months of:
      1. (i) the day it receives the further details of the objection; or
      2. (ii) where it receives no further details within 1 month of the date of the acknowledgement in accordance with (a), the date of the expiry of that 1 month period.
5. (5) The actions in (4)(c) are to either:
   1. (a) send a redress determination containing the information in CONRED 5 Annex 3 that confirms:
      1. (i) that the lender has rejected the consumer’s objection; and
      2. (ii) the total amount of redress payable to the consumer in full and final settlement of all claims within the subject matter of the scheme relating to this case; or
   2. (b) send a redress determination containing the information in CONRED 5 Annex 3 that confirms:
      1. (i) the lender’s acceptance of the consumer’s objection; and
      2. (ii) the revision of the provisional redress decision and recalculated total amount of redress payable in full and final settlement of all claims within the subject matter of the scheme relating to this case.
6. (6) Where the consumer does not respond to the provisional redress decision within 1 month, the lender must send a redress determination confirming the provisional redress decision and containing the information in CONRED 5 Annex 3 within 1 month of the expiry of that period.

(7) Where the consumer responds to the redress determination within a minimum of 6 months stating that they accept the determination in full and final settlement, the lender must, within a 7-day period, beginning on the day the response is received, send the consumer a communication acknowledging the acceptance.

1. (8) Any communication sent by a lender under this rule must be sent in a durable medium.

1. (1) Where a lender receives an acceptance of the provisional redress decision sent in accordance with CONRED 5.2.7R(1) or CONRED 5.4.36R or the redress determination sent in accordance with CONRED 5.4.37R(5) or CONRED 5.4.37R(6), it must recalculate the amount of compensatory interest payable as part of the redress calculations to reflect the actual redress payment date.
2. (2) Where the motor finance agreement is ongoing, and there are no undisputed arrears or default sums, the lender:
   1. (a) may provide the consumer with the option of offsetting the amount of redress against any outstanding principal instead of receiving it as a separate payment; and
   2. (b) must offset the amount of redress against the outstanding principal where the consumer gives consent to do so.
3. (3) Within 1 month of receiving acceptance of the provisional redress decision or the redress determination, the lender must pay the amount of redress to the consumer either by bank transfer or in accordance with the consumer’s instructions.

1. (1) Simple interest is payable on the amount of redress from the end of the 1-month period referred to in CONRED 5.4.38R(3) until the date of payment of redress, at a rate of 8% per annum.
2. (2) After the expiry of the 1-month period in CONRED 5.4.38R(3), the amount of redress, including interest, may be recovered as a debt due to the consumer and, in particular, may:
   1. (a) if a county court so orders in England and Wales, be recovered by execution issued from the county court (or otherwise) as if it were payable under an order of that court;
   2. (b) be enforced in Northern Ireland as a money judgment under the Judgments: Enforcement (Northern Ireland) Order 1981; or
   3. (c) be enforced in Scotland by the sheriff, as if it were a judgment or order of the sheriff whether or not the sheriff could themselves have granted such judgment or order.

1. (1) Where a lender receives a communication set out in (2) after a deadline specified by this chapter due to exceptional circumstances (taking account of all of the circumstances of the case), the response must be considered under this chapter as if it had been received before that deadline.
2. (2) The communications referred to in (1) are:
   1. (a) a response to a communication sent to a consumer under this chapter; and
   2. (b) a complaint the lender would have been required to consider under CONRED 5.2.17(R)(2) had it been received before the end of the 17-month period referred to in that rule.
3. (3) Where (1) applies, the time limits in this chapter are extended according to the length of delay caused by the customer’s failure to comply with the deadline.

1. (1) the consumer’s incapacitation or other serious ill-health condition or a bereavement during the relevant period; or
2. (2) where the lender failed to comply with the requirements in this chapter.

1. (1) A successor is liable for a portion of the redress, calculated by the lender in accordance with CONRED 5.4.44R.
2. (2) A successor must promptly pay its portion of the redress to the lender.

1. (1) CONRED 5.4.42R(2) clarifies how a successor discharges its portion of the liability, but this is without prejudice to any rights of indemnity or contribution a successor may have against a lender under the contractual arrangements between them or pursuant to the Civil Liability (Contribution) Act 1978.
2. (2) The obligation on a successor to pay the lender promptly under CONRED 5.4.42R(2) is to allow the lender to make a single payment to the consumer for the full redress amount and within the timeframes required by the scheme.
3. (3) CONRED 5.4.42R(2) does not allow for multiple payments to a consumer. A lender is responsible under CONRED 5.4.38R(3) for making a single payment of redress to consumers within the timeframes required by the scheme, including when there is a successor.

1. (1) For all scheme cases where the lender has identified a successor, the lender must calculate the successor’s liability using the successor liability formula.
2. (2) The successor liability formula is:

3. S = (R / T) x D

   1. where:
   2. (a) S = successor’s liability;
   3. (b) R = redress payable to a consumer;
   4. (c) T = term of the relevant loan represented in days; and
   5. (d) D = number of days for which the successor holds the loan.
4. (3) The reference in CONRED 5.4.44R(2) to the successor holding the loan is to be read as meaning the period beginning on the day the person became a successor of the relevant motor finance agreement and, if relevant, ending the day before another person became a successor of the same motor finance agreement.

1. (1) Where there has been a material failure by the lender to take any of the actions required under this chapter, the FCA may:
   1. (a) take any of the steps in CONRED 5.2 to CONRED 5.4 in place of the lender; or
   2. (b) appoint one or more competent persons to take any of the steps in CONRED 5.2 to CONRED 5.4 in place of the lender.
2. (2) The FCA must give the lender notice before taking any steps under (1).

1. (1) not carry out (or, as the case may be, cease to carry out) any of the steps to be taken by the FCA or the competent person, unless so directed by the FCA or the competent person (as applicable); and
2. (2) render all reasonable assistance to the FCA or the competent person. 

1. (1) providing the requested information in the format requested or, if that is not reasonably practicable, a reasonable format; or
2. (2) confirming that it does not hold the requested information.

1. (1) Where the FCA or a competent person takes any steps under CONRED 5.5.1R and the FCA proposes to make any determination of:

   1. (a) whether there has been a material failure by the lender to take any actions required under this chapter;
   2. (b) whether a failure by a lender has caused loss to a consumer; or
   3. (c) what the provisional redress sum must be in respect of the failures,

   the FCA must give the lender a warning notice specifying the proposed provisional determination.

2. (2) The provisional redress sum in (1)(c) must be the amount that would be owed to a consumer if a redress determination was made pursuant to CONRED 5.4 on the same date as the warning notice.

1. (1) If the FCA decides to make a determination of the matters in CONRED 5.5.7R, the FCA must give the lender a decision notice specifying the determination.
2. (2) If the FCA makes such a determination, the lender may refer the matter to the Tribunal.

1. (1) Where, instead of the lender, the FCA or, where applicable, a competent person communicates with a consumer:
   1. (a) the FCA or the competent person must do so in its own name, making clear in the case of a competent person its authority from the FCA to do so; and
   2. (b) the FCA or the competent person must make such amendments to the communications in the forms set out in CONRED 5 Annex 2 to CONRED 5 Annex 10 as appropriate to reflect that they are being sent in the name of the FCA or the competent person.
2. (2) Where, instead of the lender, the FCA or, where applicable, a competent person issues the redress determination:
   1. (a) the FCA or the competent person must update the redress sum in the provisional decision no earlier than 1 month after the issue of a final notice in respect of the FCA’s decision to make a determination of the matters in CONRED 5.5.7R to reflect the amount that is owed at the time such redress determination is made; and
   2. (b) the FCA or the competent person must send the lender a copy of the consumer’s response to the redress determination.

1. (1) A lender must ensure that the steps required by this chapter are undertaken or supervised by the individual appointed by the lender under DISP 1.3.7R where that rule applies.
2. (2) Where DISP 1.3.7R does not apply, those steps must be taken or supervised by a person of appropriate experience and seniority.

1. (1) Any lender intending to outsource any of the obligations imposed on it under this chapter must have due regard to the rules and guidance on outsourcing which are applicable to it, notably in SYSC.
2. (2) A lender which outsources any of the obligations imposed on it under this chapter in respect of communications with consumers must ensure that those communications are clear as to the identity of the lender.

1. (1) meet the information needs of those consumers;
2. (2) are likely to be understood by the consumers intended to receive the communications;
3. (3) equip those consumers to make decisions that are effective, timely and properly informed; and
4. (4) are tailored, taking into account the characteristics and needs of the consumers intended to receive the communication, including:
   1. (a) any characteristics of vulnerability;
   2. (b) the complexity of the relevant motor finance agreements;
   3. (c) the communication channel used; and
   4. (d) the lender’s role.

1. (1) tailor its communications to meet the information needs of that consumer, taking account of whether they have any characteristics of vulnerability; and
2. (2) ask the consumer whether they understand the information and whether they have any further questions.

1. (1) enables the communication of relevant information, which is required by this consumer redress scheme or which consumers are likely to need, in a way that supports effective decision-making; and
2. (2) provides an appropriate opportunity for consumers to review the information and, where relevant, assess their options. 

1. (1) enclose or attach any relevant documents and, where the communication is a letter, enable the consumer to respond free of charge by including pre-paid envelopes;
2. (2) where the communication is a redress determination, insert a link to, or include the URL of, the Financial Ombudsman Service in respect of such determination;
3. (3) complete the communication by following the instructions set out in the specified Annex; and
4. (4) comply with any instructions in the specified Annex.

1. (1) increase the risk of financial crime as compared to communicating by letter; or
2. (2) make it more difficult for that consumer to access the scheme than had the consumer been communicated with by letter.

1. (1) Where a lender holds contact details for a consumer and becomes aware that the details are out of date, it must:
   1. (a) take all reasonable steps to obtain up-to-date contact details for the consumer, including by contacting an appropriate third party such as a credit reference agency;
   2. (b) where appropriate, resend any communication; and
   3. (c) repeat any other steps to contact the consumer required by this chapter.
2. (2) If, having complied with (1), a lender is unable to contact a consumer, it need not take any further action pursuant to this chapter in relation to that consumer unless (3) applies.
3. (3) If, in relying on (2), the lender has ceased taking action but subsequently becomes aware of up-to-date contact details for that consumer, the lender must resend any communications and repeat the steps to contact the consumer required by this chapter.
4. (4) The means by which the lender may become aware of up-to-date contact details under (3) include receiving an opt-in communication or a complaint from the consumer:
   1. (a) within 17 months of scheme effective date; or
   2. (b) more than 17 months after the scheme effective date where the exceptional circumstances referred to in CONRED 5.4.41G apply.
5. (5) If a lender is resending a communication and repeating steps pursuant to (3), each applicable deadline for those steps is extended according to the length of the delay incurred by the application of (2).

1. (1) This rule applies where, under this chapter, a lender contacts a consumer who has not previously complained to the lender about a motor finance agreement.
2. (2) Where a lender contacts a consumer a second time because that consumer did not respond to the lender’s first communication, the lender must attempt to do so using an alternative communication channel.
3. (3) Where the lender does not have the contact details for a consumer using an alternative communication channel under (2), it must take all reasonable steps to obtain such contact details, including by contacting an appropriate third party such as a credit reference agency.
4. (4) Where a lender is not able to obtain alternative contact details after taking all reasonable steps as referred to in (3), it may send the communication by the same communication channel as before.

1. (1) checking public sources of information (for example, electoral rolls) but without incurring disproportionate cost;
2. (2) attempting to contact the consumer by telephone (at a reasonable hour when the consumer is likely to be available to receive the call) and by email; and
3. (3) attempting to contact any other party by telephone (during business hours) and by email.

1. (1) not request more information than is sufficient for it to determine all of the outstanding matters;
2. (2) exercise sensitivity when requesting information about a consumer’s personal circumstances;
3. (3) ensure the consumer understands what information they have been asked to provide and in what format;
4. (4) only ask for information that is likely to be readily accessible to the consumer (and obtain the consumer’s authority to approach third parties for information on their behalf);
5. (5) allow the consumer at least 1 month to respond; and
6. (6) make clear why the lender is asking for the information and the consequence if the information is not provided.

1. (1) a personal representative of the consumer’s estate; or
2. (2) the beneficiaries of the consumer’s estate.

1. (1) the date the redress determination is sent by the lender to the consumer; and
2. (2) the date:
   1. (a) the complaint is resolved by agreement between the lender and the consumer pursuant to DISP 3.5.1R; or
   2. (b) the lender receives notification from the Financial Ombudsman Service of the outcome of the complaint in accordance with DISP 3.6.6R(5).

1. (1) if it intends to implement any of the scheme steps during the implementation period; and
2. (2) of the name of the senior manager (or equivalent where there is no senior manager) responsible for oversight and overall delivery of the scheme and contact details (‘senior manager responsible’).

1. (1) A lender must provide the information in (2) if, under CONRED 5.2.1R, the lender intends to implement any of the scheme steps before the end of the implementation period.
2. (2) The information is:
   1. (a) the date the lender intends to begin processing scheme cases under CONRED 5.2.1R;
   2. (b) the one-off information set out in CONRED 5.9.6R;
   3. (c) a scheme implementation plan that contains the information set out in CONRED 5.9.7R; and
   4. (d) a forecast report that contains the information set out in CONRED 5.9.9R.
3. (3) The information must be provided no later than 15 working days before the lender begins identifying scheme cases in accordance with the first and second scheme steps (as set out in CONRED 5.2.9R to CONRED 5.2.17R). 

1. (1) If a lender begins identifying scheme cases in accordance with the first and second steps (as set out in CONRED 5.2.9R to CONRED 5.2.17R) before the end of the implementation period, CONRED 5.9.11R to CONRED 5.9.23R apply with the modification in (2).
2. (2) In CONRED 5.9.11R and CONRED 5.9.13R, the reference to ‘the end of the implementation period’ must be substituted with ‘the date on which the lender began processing scheme cases under CONRED 5.2’. 

1. (1) the number of motor finance agreements in the lender’s starting population, identified in accordance with CONRED 5.1.6R;
2. (2) the number of complaints relating to motor finance agreements received by the lender prior to the scheme effective date;
3. (3) the number of complaints in (2) where complainants are represented by a professional representative, such as a claims management company or a solicitor;
4. (4) the number of complaints in (2) where complainants are represented by multiple professional representatives, such as a claims management company or a solicitor; and
5. (5) attestations from the senior manager responsible, confirming that the lender has the systems and controls to:
   1. (a) successfully identify the starting population of potentially impacted customers in accordance with the first and second steps set out in CONRED 5.2.9R to CONRED 5.2.17R;
   2. (b) identify which of its own records and information are relevant assessing motor finance agreements, as required by this chapter; and
   3. (c) take the steps under the scheme to obtain relevant records and information required to assess motor finance agreements from third parties where these are not held by the lender.