CONRED 5.2 Consumer redress scheme: scheme steps and identifying scheme cases

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.