The Financial Conduct Authority (FCA) has proposed a comprehensive redress scheme for motor finance consumers, launching in May 2026. Here's everything you need to know. For a complete overview of car finance claims, see our car finance compensation guide.
What Is the Redress Scheme?
Motor Finance Redress Scheme
An industry-wide program designed to compensate consumers who were charged undisclosed or excessive commission on car finance between 2007-2024. One of the largest consumer redress initiatives in UK financial services history.
The Motor Finance Consumer Redress Scheme is an industry-wide program designed to compensate consumers who were charged undisclosed or excessive commission on car finance between 2007-2024.
Historic Consumer Redress
This represents one of the largest consumer redress initiatives in UK financial services history, affecting up to 14 million consumers and costing the industry an estimated £11 billion.
When Does It Launch?
May 2026 is the target launch date.
Key Dates
Don't Wait Until May 2026
With up to 14 million potentially eligible consumers, submitting your claim early helps ensure you're at the front of the queue when the scheme launches. Claims submitted now will be processed first.
Who Is Eligible?
You May Be Eligible If:
- Had motor finance agreements between 2007-2024
- Were subject to [Discretionary Commission Arrangements (DCAs)](/car-finance-claims/understanding-discretionary-commission-arrangements)
- Were not adequately informed about commission
- Had agreements with participating lenders (like [Black Horse](/car-finance-claims/black-horse-refund))
According to FCA estimates, up to 14 million consumers may be eligible.
How Will It Work?
The Scheme Process
How the Burden of Proof Works
This Shifts the Advantage to Consumers
The scheme creates a presumption that if disclosure was inadequate, you suffered loss. This is significant: lenders must prove you weren't harmed, rather than you proving you were. This makes claims much easier for consumers.
What Compensation Can You Get?
The scheme proposes two remedies:
Remedy 1: Commission Repayment
Return of the undisclosed commission paid, plus statutory interest (8% per year). This is the simpler calculation.
Example: If £1,500 commission was paid in 2015:
- Commission: £1,500
- Statutory interest (8% for ~10 years): ~£1,200
- Total: ~£2,700
Remedy 2: APR Adjustment
Calculation of what you would have paid without the inflated commission, with the difference refunded.
Example: If your APR was 8% instead of 6%:
- Extra interest paid over 4 years: ~£1,800
- Statutory interest: ~£400
- Total: ~£2,200
Consistent Methodologies
The FCA will set out clear methodologies for calculating redress to ensure consistency across lenders. You'll receive whichever remedy gives you the higher amount.
Industry Impact
The redress scheme is expected to cost the motor finance industry approximately £11 billion (including implementation costs).
Major affected lenders include:
- Black Horse Finance
- Close Brothers Motor Finance
- MotoNovo
- Santander Consumer Finance
- Barclays Partner Finance
- And many more...
Why Get Your Claim In Early?
With up to 14 million potentially eligible consumers, the scheme will face significant volume:
Beat the Rush
Claims submitted before May 2026 will be queued and processed first when the scheme launches. With millions of claims expected, being at the front of the queue could mean receiving your compensation months or even years earlier.
Advantages of Early Claims
Current Status (December 2025)
The FCA has:
- Closed consultation on CP25/27
- Extended complaint handling pause to December 4, 2025
- Published policy statements on handling procedures
- Set framework for May 2026 launch
Lenders are currently:
- Pausing complaints under FCA rules
- Preparing systems for the scheme
- Training staff on new procedures
- Reviewing historical agreements
What Should You Do Now?
If You Had Car Finance (2007-2024):
Get Your Claim Queued
Ready to Get Started?
Submit your details now to be at the front of the queue when the scheme launches in May 2026.
Check My EligibilityYou Don't Need a CMC
Your Rights
You can submit claims yourself for free:
- Directly to the lender
- Via the Financial Ombudsman Service
- Through FCA complaints procedures
However, many consumers prefer professional help with:
- Locating agreements (soft credit checks)
- Complex paperwork
- Dealing with lenders
- Calculating redress
Our Service
No Win, No Fee Service
At My Claims Centre, we handle everything for you:
- Work on no win, no fee (30% + VAT, capped)
- Use soft credit checks to find your agreements
- Deal with lenders on your behalf
- Keep you updated throughout the process
Key Dates to Remember
- May 2026: Redress scheme launches
- 2007-2024: Eligible agreement period
- January 2021: DCAs banned
- Now: Best time to submit claims (beat the queue)
What Happens After May 2026?
Once launched, the scheme will:
- Process claims systematically
- Issue responses within set timeframes
- Provide clear compensation calculations
- Offer escalation routes for disputes
The FCA expects the bulk of claims to be processed within 12-18 months of launch, though complex cases may take longer.
Staying Compliant
All information in this article is based on:
- FCA consultation paper CP25/27
- Motor Finance Redress documentation
- Published FCA timelines and statements
- Verified industry estimates
No speculative amounts or unverified claims are included.
Related Resources
Learn more about car finance claims and the redress scheme:
- Car Finance Compensation Guide - Complete overview of all claim types
- Understanding DCAs - Deep dive into Discretionary Commission Arrangements
- PCP Claims Guide - Specific information about Personal Contract Purchase claims
- Black Horse Finance Claims - Claiming against one of the UK's largest lenders
- Car Finance Compensation Calculator - How compensation is calculated
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Next Steps: Check if you're eligible by providing basic details about your car finance agreement. We'll use a soft credit check to find your agreements and get your claim queued for the May 2026 scheme launch.
