Although focused on historic car finance agreements, the consultation signals something broader – how the FCA now expects firms to evidence fairness, manage complaints and deliver redress at scale. It’s a development that matters across all lending sectors.

Think about what it would be like if the FCA said that you needed to find and contact every customer from the last 18 years. That in itself might be a daunting task, that is, before we even get into redress calculations for that period.

The consultation follows the Johnson Supreme Court ruling, which confirmed that undisclosed, high commissions and exclusive broker arrangements could make a lending relationship “unfair”.

The FCA estimates that 14.2 million agreements (around 44% of all written since 2007) may be affected. If 85% of eligible customers participate, they believe the total redress could reach £8.2 billion, with another £2.8 billion in implementation costs.

Most liabilities rest with large banks and lenders linked to the car makers, but the operational and compliance requirements will affect almost every market participant.

Many independent and specialist lenders found themselves drawn into a review that started with the use of discretionary commission arrangements. However, this redress scheme will look at every agreement that had a commission payment.

So lenders will need to review data, trace customers and show fairness. The FCA’s own figures show that independent lenders account for only about 2% of total liabilities, yet they remain within scope.

This raises a familiar challenge: rules designed for large institutions often land hardest on smaller firms serving regional or non-prime markets. The CCTA continues to argue for proportionality and practicality at every stage of implementation.

Even if your business has no link to motor finance, this consultation is worth following.

The FCA is moving towards managed, regulator-led redress rather than leaving consumers to the courts or the Financial Ombudsman Service (FOS).

Interestingly, the FCA has recognised that it is not in anyone’s interest to push mass complaints through the FOS process. There are additional case fee costs, the costs of working through a FOS investigation, as well as a risk of differing decisions.

However, that is where we face an interesting challenge: keeping people in the scheme, through effective communication, so they don’t go to FOS while keeping operational costs manageable. The scheme introduces a presumption of non-disclosure if records are missing – firms must prove fairness, not the other way round. The regulatory experts among you will point out that this is how unfair relationships are handled in the Consumer Credit Act.

However, for many firms, the concern is that this burden becomes even more difficult as we look further back in time. Proving a fair relationship spanning nearly two decades is a challenge when data is properly deleted.

We are aware that if successful, this will become the template for future industry-wide schemes. That means it is essential that the approach is considered and properly debated.

The consultation closes on 18 November 2025, with final rules expected early next year. Payments to customers could begin later in 2026.

The CCTA will submit a detailed response focusing on proportionality, data practicality and the potential costs of Ombudsman case fees. We will continue discussions with the FCA and the FOS to ensure smaller lenders can meet expectations without a disproportionate burden.

If you have any thoughts or comments, then please do get in contact with us.

1. The FCA expects to recover just over £8 billion in redress from motor finance firms.
2. The operational costs to deliver are going to be nearly £3 billion.
3. Independent lenders form a small share of the redress exposure but face similar obligations.
4. The FCA is seeking to avoid using the FOS route for mass claims.
5. The scheme shows how future redress exercises may operate.
6. Strong records and clear disclosure remain the best defence – often well beyond what you might expect under GDPR.