FCA motor finance consumer redress scheme
The FCA car finance redress scheme, explained
Page last reviewed: 20 August 2026
The background
For many years, lenders paid commission to brokers and dealers who arranged car finance. Following court rulings — including a Supreme Court judgment in 2025 — and a lengthy investigation, the Financial Conduct Authority concluded that where certain commission arrangements were not properly disclosed, customers may have been treated unfairly and may be owed compensation.
In March 2026 the FCA published its final rules for an industry-wide redress scheme. It expects millions of finance agreements to be assessed, with total compensation to consumers estimated at around £7.5 billion.
Who may be eligible
- You took out a motor finance agreement (such as hire purchase or PCP) between 6 April 2007 and 1 November 2024, and
- Commission was payable by the lender to the broker or dealer who arranged it, and
- That arrangement wasn't properly disclosed to you.
The scheme runs in two parts — one covering agreements taken out before 1 April 2014 and one covering agreements from that date onwards. You are generally excluded if your complaint has already been decided by the Financial Ombudsman or a court, or if you've already accepted redress.
The most important thing to know
The scheme is free and lender-led. You do not need to pay a claims management company or law firm a percentage of your compensation to take part. Lenders are required to contact eligible customers, and you can also complain to your lender directly at no cost. If you're unsure who your lender was, your finance agreement, bank statements or credit report will show it.
Current status and key dates
The scheme is subject to ongoing legal challenges. In July 2026 the Upper Tribunal suspended parts of the scheme's timetable while those challenges are heard, though firms must still comply with the rules that remain in force. Timelines may therefore change — the FCA's website carries the latest position, and we will keep this page updated.
| Date | What it means |
|---|---|
| 6 Apr 2007 – 1 Nov 2024 | If you took out finance for a car, motorbike or van in this window, you may be covered by the scheme. |
| 30 Jun 2026 | Scheme start date for agreements taken out on or after 1 April 2014. ⏸ Timetable paused by the tribunal. |
| 31 Aug 2026 | Scheme start date for agreements taken out before 1 April 2014. ⏸ Timetable paused by the tribunal. |
| 18 Nov 2026 | Original deadline for lenders to respond if your agreement started on or after 1 April 2014 and you complained by 30 June 2026. ⏸ Likely to move due to the pause. |
| Dec 2026 / early 2027 | Tribunal expected to hear the legal challenges to the scheme. Paused timelines may shift depending on the outcome. |
| 18 Jan 2027 | Original deadline for lenders to respond if your agreement started before 1 April 2014 and you complained by 31 August 2026. ⏸ Likely to move due to the pause. |
| 31 Aug 2027 | Final deadline to complain to your lender, even if they never contact you. If in doubt, complain before this date. |
Average compensation is estimated at around £830 per agreement, but it varies widely — some will get more, some less, and roughly 1 in 3 payouts will be capped. Don't budget for a payout until your lender confirms an amount and a date.
Sources: FCA scheme rules (PS26/3) · FCA suspension statement · MoneySavingExpert's car finance guide
Support for dealers and intermediaries
Lenders operating the scheme are required to gather historic commission agreements and disclosure records, including from brokers. We provide practical support to dealers and intermediaries responding to these data requests — locating, organising and supplying the relevant records. With over 25 years in the industry, we know where this paperwork lives and how lenders need it presented.
Frequently asked questions
Am I eligible for car finance compensation?
You may be eligible if you took out a motor finance agreement (such as PCP or hire purchase) between 6 April 2007 and 1 November 2024, commission was payable by the lender to the broker or dealer who arranged it, and that arrangement wasn't properly disclosed to you. You are generally excluded if your complaint has already been decided by the Financial Ombudsman or a court, or if you've already accepted redress.
Do I need to pay a claims company to get car finance compensation?
No. The FCA scheme is free and lender-led. Lenders are required to contact eligible customers, and you can also complain to your lender directly at no cost. Paying a claims management company or law firm typically means giving up a significant percentage of any compensation for something you can do yourself for free.
How do I find out who my car finance lender was?
Your original finance agreement will name the lender. If you no longer have it, old bank statements will show who you paid each month, and your credit report will list historic credit agreements.
When will car finance compensation be paid?
The FCA originally expected millions of consumers to be compensated during 2026, with most of the rest by the end of 2027. However, parts of the scheme's timetable were suspended by the Upper Tribunal in July 2026 while legal challenges are heard, so timings may change. Check the FCA's website for the latest position.
What is a discretionary commission arrangement (DCA)?
Under a DCA, the broker or dealer arranging your finance could increase their own commission by setting you a higher interest rate. These arrangements were banned by the FCA in January 2021, and poorly disclosed commission arrangements are central to the redress scheme.
Official resources
- FCA — car finance complaints and the redress scheme
- Financial Ombudsman Service
- MoneyHelper (free, government-backed guidance)
This page is general information, not legal or financial advice, and it is not an invitation to use a paid claims service. Consumers can use the redress scheme free of charge through their lender; Essex Car Finance does not provide claims management services or handle consumer redress claims. Our redress-related services are professional support for dealers and intermediaries only. Scheme details and timelines are set by the FCA and may change; always check the FCA's own publications for the current position.