Motor Finance Commission Claims: FCA Update and What It Means for Consumers

Motor Finance Commission Claims: FCA Update and What It Means for Consumers

Motor finance commission claims have become one of the biggest consumer redress issues in the UK in recent years. Where commission was paid to a broker/dealer and was not properly disclosed or where it created an unfair outcome, consumers may be entitled to compensation under an FCA-led redress scheme now being finalised.

The FCA has confirmed it is considering over 1,000 responses to its proposals and that final decisions have not yet been made. If the FCA proceeds, it expects to publish final rules in late March, outside market hours (with the publication date to be confirmed in advance).

What’s the issue?

The FCA’s proposed scheme is focused on historic motor finance practices where consumers were not given appropriate transparency about commission arrangements and, in some cases, ended up paying more. The FCA has proposed the scheme would cover regulated PCP/hire purchase/conditional sale agreements taken out between 6 April 2007 and 1 November 2024 where commission was payable by the lender to the broker/dealer.

The FCA has estimated the scheme could be very large (potentially around 14 million agreements), with an average redress estimate of around £700 per agreement (individual outcomes will vary).

FCA’s likely changes to make the process faster and simpler

To help firms prepare and to help consumers receive any money owed promptly the FCA has indicated it is likely to streamline the consumer journey, including:

• An implementation period is likely: around 3 months, with up to 5 months for older agreements (firms could choose to process sooner).
• People who complain before the scheme starts would no longer be asked to opt out. Instead, within 3 months after the end of the implementation period, the lender would tell them whether compensation is due and how much.
• Consumers who receive a redress offer could be able to accept it immediately, rather than waiting for a final determination.
• Firms would not be required to write via recorded delivery; a range of contact channels may be allowed, with safeguards to prevent fraud.
• Even with an implementation period, the FCA has said the streamlining should still mean millions receive compensation in 2026 (if the scheme goes ahead)

Key dates (as currently confirmed by the FCA)

• The FCA’s consultation on the redress scheme proposals closed on 12 December 2025.
• The FCA has said they will publish the rules at the end of March 2026
• The FCA expects compensation to begin being paid during 2026 if the scheme proceeds (timing depends on the final rules and implementation period).

How we support clients during the FCA timetable

Even during regulatory “pause” periods, a well run claim shouldn’t be idle. We help clients by:

• organising and checking documentation so the claim can progress quickly once rules are final
• monitoring FCA updates so advice stays current
• advising on any lender communications especially where wording suggests “full and final settlement”

If a lender contacts you directly, keep the correspondence and forward it to caf@complexlaw.co.uk so we can review and advise.

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