The FCA yesterday (7 October) 2025 published its proposed redress scheme for consumers to obtain compensation if it had been unaware of commission payable by a finance lender to a broker.  It outlines that compensation will be available if a consumer wasn’t told details of at least one of 3, specific arrangements between the lender and the broker who sold the loan (often a car dealer), they are:

  1.  A discretionary commission arrangement, which allowed the broker to adjust the interest rate the customer would pay to obtain a higher commission; or
  2.  A high commission arrangement (35% of the total cost of credit and 10% of the loan); or
  3.  A contractual arrangement or tie between the lender and broker, which provided exclusive or near exclusive rights to lenders to provide credit.

The motor finance agreement must have been taken out between 6 April 2007 and 1 November 2024.  Taking part in the FCA scheme is optional.  Consumers may go to court, but it is hoped the FCA scheme will make a claim more straightforward and faster, also avoiding court costs.

Views are being sought on the proposed scheme, that lenders will have to implement. It is proposed lenders will make contact with those who have already complained first, and then within six months, it will contact others to see if they want to opt into the scheme.  The FCA intends to run a campaign to create awareness of the scheme, which it is anticipated will be up and running next year, 2026.  Payouts could reach over 8 billion, as some consumers may have taken out several motor finance agreements over the 17 year period being covered.