Industry Thoughts

Once built around showrooms and paperwork, the motor finance sector has evolved into a digital-first journey shaped by evolving customer expectations, regulatory scrutiny, and rapid technological change. Compliance, technology, and customer experience are no longer separate conversations in today’s landscape, and lenders, brokers, and dealers need to continually adapt their strategies to keep pace to deliver better outcomes.

BNPL regulation has been talked about for years. PS26/1 now sets out the rules and expectations clearly. For firms operating in this market, preparation cannot wait until the new rules take effect in July 2026, explains Jo Davis, CEO of Auxillias.

The FCA’s Mills Review arrives at a pivotal moment, asking not whether AI belongs in retail finance, but how we, as regulated firms and technology partners, can integrate it safely and transparently within established frameworks.

A recent Scottish court case involved whether or not any deduction in sums to be returned to customers should be made for use of a car where the car is ultimately rejected by the customer.

Artificial intelligence is increasingly being used across financial services to manage customer interactions and streamline internal processes. In consumer credit, where firms communicate with customers about borrowing, repayments, and financial difficulty, AI tools have the potential to improve both efficiency and clarity. As AI adoption increases, firms must ensure these technologies are used responsibly within a regulatory environment shaped by the FCAs Consumer Duty and its emphasis on delivering good outcomes for customers.

The implementation phase of Consumer Duty is over. What we are seeing now is something more probing, more data-driven and significantly more outcomes-focused. For consumer credit firms, the message from the Financial Conduct Authority is clear: the FCA is no longer asking whether firms have implemented the Duty, it is asking whether customers are genuinely better off as a result. This shift marks the beginning of the next supervisory phase which is critical.

The rise of financial influencers, or “finfluencers”, is widening access to financial education but can also expose consumers to bad advice, fraud and financial harm. Finfluencers can be a powerful force for good. They bring financial education to a mass audience with a reach that traditional programmes may not have achieved. Content on platforms such as TikTok, Instagram and YouTube have made financial guidance more accessible than ever, particularly for younger consumers.

Following the publication of the FCA’s motor finance consultation paper (CP25/27) in October 2025 and the consultation closing on 12 December 2025, the regulator has confirmed that it will set out its approach on motor finance redress shortly after markets close on Monday 30 March 2026. In a previous update on 4 March 2026, the FCA also outlined planned changes intended to streamline the customer journey and simplify implementation of a redress scheme.

So it’s the middle of March 2026. Were we expecting the policy statement from the Financial Conduct Authority (the FCA) on a motor finance consumer redress scheme by now? Yes. Do we have it? No. The FCA’s latest murmurings are that it will publish the scheme by the end of March 2026. So, for now, we wait. But given the proposed scheme is entirely based on the unfair relationship provisions in Sections 140A to 140C of the Consumer Credit Act 1974 (the CCA) (the unfair relationship provisions), what do they actually say?

The debate around discretionary commission arrangements (DCAs) in motor finance has developed rapidly over the past year, with regulatory scrutiny, legal developments and the FCA’s ongoing work on a potential redress scheme bringing increased focus to the sector. Final decisions on any compensation scheme have not yet been made. However, the regulator has begun outlining how a redress scheme could operate if it goes ahead. For many firms, the question now is simple: what does it mean to be “ready”?

The regulatory landscape for motor finance is shifting rapidly. Following the Financial Conduct Authority’s (FCA) latest update on 4 March 2026, the industry now has a much clearer view of the road ahead. With final rules expected in late March, the focus has shifted from hypothetical planning to urgent operational implementation.

Lantern Group today announced that it has agreed to acquire Ascent, one of the UK’s largest specialist debt recovery law firms, from Irwin Mitchell, subject to regulatory approval. The acquisition expands Lantern Gorup’s portfolio, with Ascent joining Lantern and Sonex. Irwin Mitchell’s strategy is to focus on growing its core legal services for individuals and businesses such as complex personal injury, medical negligence, private client, family, real estate, corporate and employment law.