FCA confirms motor finance redress scheme after Supreme Court ruling
The Financial Conduct Authority will run an industry-wide compensation scheme for undisclosed commission on car finance agreements taken out between 2007 and 2024.
By Money Guide editorial team
Published:
The FCA has confirmed it will operate a formal redress scheme for borrowers who took out regulated motor finance between April 2007 and January 2024, following the Supreme Court's ruling on undisclosed commission earlier this year.
Lenders will be required to write to affected customers, assess complaints against a common framework, and pay compensation where commission arrangements were not adequately disclosed. The FCA estimates the total redress bill could reach several billion pounds.
Consumers do not need to use a claims management company to be eligible. Complaints submitted directly to the lender, and escalated free of charge to the Financial Ombudsman if needed, are treated the same as those submitted via a third party — with no deduction for fees.
The redress timetable runs through 2026 and into 2027. The FCA has urged consumers to be alert to scams impersonating regulators, lenders and claims firms in connection with the scheme.