On 7 October 2025, the Financial Conduct Authority (FCA) published their consultation on the proposed motor finance redress scheme.
The consultation was set to last until 18 November 2025. On 5 November 2025 the FCA announced an extension to this deadline until 12 December 2025. They’ll then consider all responses before publishing their final decision.
We won’t know until the FCA close their consultation and publish their final decision on how the compensation scheme will work. They say this’ll be in February or March 2026.
They’ve said any scheme will be easy for customers to understand and participate in without needing to use a claims management company or law firm. So, we’d encourage customers to continue to submit any complaints to us directly.
What you should know:
On 11 January 2024, the FCA announced a review of the motor finance market. This was due to the high number of customer complaints about discretionary commission arrangements, which were banned in January 2021. This announcement extended the time we have to respond to complaints about discretionary commission arrangements.
On 25 October 2024, the Court of Appeal changed the legal standard needed for lenders like us to make customers aware of commission payments related to their finance on the basis that dealers owe a fiduciary duty to their customers when arranging motor finance.
On 22 November 2024, we submitted an application for permission to appeal the Court of Appeal's judgment in respect of the "Hopcraft" motor finance commissions case.
On 11 December 2024, we were informed that permission to appeal had been granted by the Supreme Court. The FCA announced that before it could take any further steps it would need to wait for the Supreme Court's decision.
On 19 December 2024, the FCA announced that they were extending the time that motor finance lenders have to respond to complaints about any commission payments linked to motor finance. This extension is due to last until 4 December 2025. However, the FCA have been consulting on extending the deadline for firms to send a final response to certain motor finance complaints to 31 July 2026.This consultation has now closed and we’re waiting to hear the final decision.
On 1 August 2025, the Supreme Court confirmed that the dealers did not owe a fiduciary duty, but there can be situations where the relationship between the customer and dealer can be unfair.
On 3 August 2025, the FCA announced their plans to establish a consumer redress scheme and there would be a consultation to outline the proposed scheme and who would be eligible.
If their agreement was taken out before 28 January 2021, there may have been a discretionary commission arrangement (DCA) in place.
If their motor finance agreement started after this date, we may have paid a different type of commission. This is known as a ‘non-discretionary commission arrangement’ or non-DCA.
The review covers motor vehicles. We provide finance for cars, vans, motorcycles and leisure vehicles (like motorhomes). All these types of motor vehicles are covered by the review.
This applies to both new and used motor vehicles.
The FCA’s review covers Hire Purchase, Personal Contract Purchase (PCP) and Conditional Sale.
This applies to consumers, sole traders, and partnerships. If your customer is a limited company or LLP and they’ve taken out finance with us, they aren’t impacted by this.
Customers in Northern Ireland are treated in exactly the same way as customers in England, Scotland and Wales, which means the announcement does apply to them.
No. There is a different regulator with separate regulations in Ireland and that means they aren’t impacted by this announcement.
On 11 January 2024, the FCA introduced a record retention rule in their handbook (DISP 5.3). Lenders and credit brokers (such as dealers and brokers), must retain and preserve the following (whether in paper or electronic format):
The FCA now require that you do not delete, or dispose of records relating to regulated motor finance agreements where there was a commission arrangement in place between us, if this information is or could be relevant to handling future complaints or claims.
This requirement is in force until 11 April 2026.
You can find more information about how you should process customer data in our Dealer and Broker Conduct Guide, which can be found here
If you’re contacted by the FOS, for example to complete a Motor finance commission: Business response form, it’s likely that one of your customers has complained to the FOS about motor finance commission. You should respond with the information requested at your earliest convenience, and within any timescales the FOS sets out.
If you receive a ‘letter before action’ from a CMC, it’s important you do not ignore this communication. If you need support, we recommend you seek your own legal advice. We would also be grateful if you could forward us a copy of the ‘letter before action’ for our records.
At this stage, we can’t comment on any potential compensation customers may be entitled to. What we do know is that on 11 January 2024, the FCA announced that they were undertaking a review in the motor finance market and on 19 December 2024 they broadened the scope of their complaints pause connected with this review.
Following the Supreme Court’s judgment on 1 August 2025 the FCA have said they’re planning to put a compensation scheme in place. The first step towards this is a consultation phase. This consultation began in October 2025 and was extended until 12 December 2025. If the scheme goes ahead, payments to customers are expected to begin in 2026.
We won’t know until the FCA publish their decision how this will work, so we’re encouraging customers to continue to submit any complaints to us directly. They don’t need to use a claims management company to do it.
Because of their review, the FCA put a pause on lenders responding to commissions complaints until 4 December. Their consultation on extending this pause has finished and we’re waiting for the outcome.
You can find out more about the FCA’s work on their website, which is fca.org.uk/.
Ask them to visit this page on our website and follow the steps to check their details and complain about commission. Our online form is the quickest way to make a complaint about commission linked to their motor finance agreement(s).
Please ask them to visit this page on our website and complete our online form with as much information as they do have.
To be able to confidently match a customer’s complaint with a historical finance agreement, we need the following information:
If we can confirm that the customer had an agreement with us which included commission, we’ll automatically log a complaint for them.
Normally, we must provide a response within eight weeks, or let the customer know that we need longer.
While they carry out their review, the FCA have put in place a pause in responding to all customer complaints about motor vehicle finance commissions.
The pause is currently due to end 4 December 2025.
No. There are no changes to how and when we must respond to all other types of complaints. The changes only relate to commission complaints.
Information on the FCA’s review and the temporary measures they’ve put in place.
Summary of criteria for customers making a complaint about commission, and the additional support they provide.
Further detail for firms affected by the FCA’s review.
Customers can find out more information and decide whether to raise a complaint with us if they think they’ve been affected.