What motor finance firms need to do now

What motor finance firms need to do now 

On 30th March 2026, the FCA published its final motor finance consumer redress scheme for firms handling historic motor finance commission and motor finance complaints. It has the potential to become one of the largest structured redress exercises in the UK retail lending market. 

The position has now materially shifted and the FCA motor finance redress scheme is subject to legal challenge from both lenders and a consumer group.  

Motor finance providers are operating in a period of uncertainty around how motor finance compensation and redress will ultimately be delivered – yet the regulatory expectation remains: preparation for the  redress scheme should continue. 

Motor finance redress scheme legal challenge

What is the FCA’s motor finance consumer redress scheme?

The FCA’s motor finance consumer redress scheme addresses widespread historic inadequate disclosure of commission arrangements in the UK motor finance market, which the FCA says may have created unfair relationships under section 140A of the Consumer Credit Act 1974. 

Two separate schemes apply: 

• Scheme 1 covers agreements from 6 April 2007 to 31 March 2014 

• Scheme 2 covers agreements from 1 April 2014 to 1 November 2024 

The FCA has estimated that around 12.1 million agreements are in scope, representing significant potential redress exposure across the market. 

Key elements of the scheme are now being legally challenged, including its underlying assumptions, scope and approach to compensation. As a result, the final design and delivery model cannot yet be considered fixed. 

Why motor finance firms should act now

Regulatory expectations remain unchanged. The FCA has been explicit that firms should continue preparing for the scheme while the legal process progresses. Work supporting motor finance data readiness, complaint handling and remediation planning will be required across multiple scenarios. 

Uncertainty does not remove accountability: While legal challenges are ongoing, firms remain responsible for demonstrating fair treatment of customers and maintaining effective complaint handling. 

Operational demand is still building: Whether delivered through a centralised scheme or a more complaint-led route, firms should expect sustained volumes of customer claims. 

Reputational risk remains: Delays or poor handling of complaints during this period may impact consumer trust and regulatory scrutiny. 

Need for flexibility: Firms must now plan for different potential outcomes rather than a single defined scheme. 

Continue your motor finance redress preparation

The FCA has set a clear expectation that firms continue advancing practical preparation activity while next steps are being determined for the motor finance redress scheme. 

This includes: 

• Identifying relevant motor finance agreements and affected customer cohorts 

• Gathering and validating data on commission structures and disclosure practices 

• Progressing implementation planning and remediation approaches 

• Maintaining complaint-handling processes rather than deferring activity indefinitely 

• Preparing for alternative scenarios including changes to the scheme or a more complaint-led approach 

Firms should act now to be better placed to adapt quickly, demonstrate compliance and deliver fair customer outcomes, whichever direction the final scheme takes.

Advance your motor finance redress scheme readiness with TCC expertise

TCC Group has supported financial services firms with complex regulatory change, remediation and redress programmes for over 20 years, including support for motor finance reviews, redress operations and complaint surge management. 

We help motor finance providers to: 

• Assess and quantify risk across historic motor finance portfolios 

• Design FCA-aligned redress methodologies 

• Strengthen governance and complaint-handling processes 

• Build flexible operating models that can adapt as the regulatory position evolves 

• Rapidly deploy skilled resources to manage reviews, remediation and complaint surges 

AI-powered motor finance review and redress technology

In partnership with our technology partner Recordsure, TCC offers AI-powered speech and document analytics to support motor finance redress preparation at scale. 

Recordsure’s technology rapidly reviews historic customer interactions –  across recorded calls, meetings, emails and documents –  to identify evidence of commission disclosure (or lack thereof) at scale. 

This supports firms in progressing the data gathering and validation work that the FCA has made clear should continue. 

Scalable support 

We also partner with our sister company Momenta to quickly scale resourcing for complaint handling and remediation. 

Their specialist talent pool supports firms managing increased demand, while TCC ensures regulatory alignment, oversight and quality of delivery. 

Talk to our experts today to understand how you can build a structured, flexible and regulator-ready approach to motor finance redress, complaint handling and FCA scheme readiness. 

Read more about the motor finance redress scheme legal challenge in our expert insight  

Talk to TCC experts today

Get in touch to find out how we can help you build a proactive response to motor finance