The Financial Conduct Authority has said as many as 30 million motor finance agreements issued between 2007 and 2020 could qualify for redress. The regulator is carrying out an industry-wide consultation on a compensation scheme after findings that some lenders or dealers did not properly disclose commissions paid to car dealers that sold the loans. The FCA said discretionary commission arrangements (DCAs) were involved in about 14.6 million deals in the same period.

Nikhil Rathi, the FCA’s chief executive, told MPs the scope of the scheme is still being decided and that the regulator is examining how broad it should be. He said a very large proportion of DCAs probably breached the law on disclosure and, by extension, unfair lending relationships. The consultation is due to launch in early October, and the FCA hopes compensation where due can start next year.

The watchdog warned consumers not to rely on lawyers or claims management companies for claims and flagged potential scams. It has intervened in around 400 CMC promotions since 2024, with 171 altered since the Supreme Court judgment. The FCA says the average redress is likely to be hundreds of pounds rather than thousands, and it has previously suggested most individuals would receive under £950. The final cost of the scheme is put at £9 billion to £18 billion (€10.4–€20.9 billion). At least 38 motor finance firms are expected to be involved in running the scheme. The Supreme Court ruling in August found lenders were not liable for hidden commission payments, but the FCA said some firms had breached the law and customers deserve compensation. For context, advertisers claim they may get more than £4,500 (€5,220).