Channel Islands Drivers Excluded From UK Car Finance Compensation Scheme

Motorists in Jersey and Guernsey have been reminded they are not covered by a UK compensation scheme set up for customers mis-sold motor finance agreements.

The Financial Conduct Authority (FCA) introduced the scheme in March, with drivers across the UK expected to receive average payouts of around £829 where complaints are upheld.

However, the Channel Islands Financial Ombudsman (CIFO) has clarified that the compensation programme does not extend to customers in the Channel Islands because it applies only to UK-based motor finance agreements.

CIFO said it issued the clarification after seeing reports that had led to confusion among islanders about whether they were eligible for compensation.

Despite being excluded from the UK scheme, customers in Jersey and Guernsey may still be able to pursue complaints locally through the ombudsman service.

CIFO said complaints relating to motor finance agreements arranged in the Channel Islands fall within its remit and can be independently reviewed.

The organisation added that where complaints are found to have merit, compensation of up to £150,000 could potentially be awarded.

Customers were advised to first raise concerns directly with the loan provider, car dealership or lender involved in arranging the finance agreement before escalating the matter further.

CIFO said customers dissatisfied with the outcome - or those who do not receive a response within three months — can then refer the complaint for an independent review.