FCA redress consultation explained: Key impacts on motor finance

What happened?

TCC and Recordsure recently hosted an industry webinar: ‘Driving change – FCA redress and the future of motor finance’, featuring CCO Garry Evans, Advisory Director Gary Maude, and Momenta Head of Operations Mike Morris. The panel explored the massive operational challenge created by the Supreme Court’s Johnson ruling and the FCA’s proposed redress scheme.

The discussion highlighted critical challenges, including handling CMC-driven complaints, resourcing massive remediation spikes, and deploying advanced technology to scale calculation and communication workflows.

Why does it matter?

The Supreme Court’s Johnson ruling has narrowed the legal definition of commission fairness while complicating its operational application. While commission size, disclosure transparency, and consumer vulnerability dictate fairness, firms must assess cases individually rather than applying blanket rules.

This individual assessment, coupled with a surge in claims management company (CMC) complaints, creates a major resourcing crisis. Lenders face a severe shortage of skilled complaints-handling personnel, making automated, tech-led workflows critical to process claims on time.

Here we outline five key considerations discussed by the panellists. 

Driving change: The Supreme Court ruling sparks industry debate

Industry practitioners suggest that FCA’s approach could trigger a wave of claims management company-led complaints. Yet a narrower focus, such as limiting cases to discretionary commission arrangements (DCAs) or shortening the lookback period, might ease the burden while heightening the need for robust, case-by-case handling.  

Breaking down the ruling: what the Johnson case means for redress

The Supreme Court’s recent ruling on discretionary commission arrangements (DCAs) has sent shockwaves through the motor finance sector, with far-reaching implications for redress and complaint handling. Garry Evans Chief Product Officer and Chief Commercial Officer at TCC and Recordsure, and Gary Maude Director of Advisory Services at TCC, break down the facts from the FCA’s announcement of a forthcoming compensation scheme to the key findings of the Johnson case. They explained how the decision has narrowed in scope yet added complexity, and what this might mean for firms already managing a high volume of complaints.  

From legal definitions to operational realities: who feels the impact?

Our experts unpacked the Supreme Court’s nuanced stance on commission arrangements – recognising that while such payments may be legal, the fairness of each case depends on its specific circumstances. Using the Johnson case as a focal point, they explored factors such as commission size, disclosure practices and consumer characteristics that could tip the balance towards an “unfair relationship” under the Consumer Credit Act.   

The conversation also highlights the operational realities this creates for creditors, brokers and claims management companies (CMCs) and how the FCA’s forthcoming consultation could shape redress scope and processes.  

The resourcing crunch: preparing for a remediation surge

Resourcing is set to become one of the biggest challenges in delivering the upcoming motor finance remediation and redress programme. Mike Morris, Head of Operations at Momenta, shares how the Supreme Court ruling has shifted the balance from high volume automated redress towards more complex, bespoke complaint handling –and why this change could push demand for skilled case handlers far beyond current supply.   

From procurement pressures to the risk of all firms “fishing in the same pool” for resource, the conversation explores the operational realities firms must now factor into their planning.  

Plan for the worst, act early: winning the remediation race

As the motor finance sector waits for clarity from the FCA on the final scope of its redress scheme, firms can’t afford to sit still. Our panel outlined the recommended next steps for motor finance firms –from data mining and disclosure reviews to early procurement moves.   

We also explored the potential ripple effects across the wider consumer credit market and whether claims management companies (CMCs) could push the FCA’s hand to expand the scope.