I’ve now been writing about undisclosed motor finance commissions for over four years, and last week the Financial Conduct Authority (FCA) issued a statement titled: Key considerations in implementing a possible motor finance consumer redress scheme.
The FCA has given a clear indication that there may be a redress scheme—unsurprising in itself—but the timing of this statement is curious. The Supreme Court has indicated it will deliver its judgment in July 2025, and that decision will undoubtedly have a significant bearing on any redress scheme that might be implemented. This may be more of a PR exercise by the FCA to appear proactive in resolving the issue—an issue arguably caused by their own rules and guidance over previous years.
The FCA stated:
“In March 2025, we said that if, following the outcome of the Supreme Court judgment, we conclude motor finance consumers have lost out, it’s likely that we’ll consult on an industry-wide consumer redress scheme.”
Given the hundreds of firms that have “jumped on the bandwagon” to claim compensation on behalf of consumers, the FCA has taken the positive step of advising people not to use these companies:
“We would aim to make any scheme easy for consumers to understand and participate in, without needing to use a claims management company (CMC) or law firm.
Consumers should be aware that by signing up now with a CMC or law firm, they may end up paying for a service they do not need and having to pay up to 30% in fees out of any award they may receive.”
While we await the Supreme Court’s decision, the FCA has also offered an outline of how a redress scheme might work, making it clear that compensation figures touted by law firms and CMCs are speculative at best.
The key message from the FCA is that they must be fair to consumers who have lost out, while also safeguarding the integrity of the motor finance market going forward.
Rest assured, I will continue to provide updates on any further developments in this space. If you have any questions about how this might affect your business or need support navigating this complex issue, the Lawgistics legal team is here to help.
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