The Financial Conduct Authority (FCA) has launched a nationwide awareness campaign encouraging motorists who may have been affected by the car finance scandal to understand their options before making a car finance claim.

Running across television, radio, newspapers, billboards and social media until 6 September, the campaign directs consumers to free resources on the FCA's website [1], including a template complaint letter that can be used to complain directly to a lender.

The initiative comes as millions of motorists continue to explore PCP car claims and car finance claims following the regulator's investigation into historic commission arrangements, with around 12.1 million finance agreements potentially falling within the scope [2] of the FCA car finance compensation scheme.

Helping Consumers Feel More Confident

The FCA says the campaign is designed to help people who believe they may have been affected by car finance mis-selling understand that they have a choice in how they pursue a complaint.

According to research commissioned by the regulator, more than a quarter of motorists said they lacked the confidence to complain directly without using a claims management company or solicitor [3]. At the same time, almost six in ten respondents had already made, or were considering making, a car finance claim, while almost a quarter said they were unsure what to do next.

The survey also found that more than 80% of respondents believed a free complaint template would make them more confident about contacting their lender directly.

Sheree Howard, Executive Director at the FCA, said many consumers were unsure where to start and were unaware that free resources were available to help them submit a complaint themselves.

You Have More Than One Option

If you believe you may have been affected by mis-sold car finance, there is no single route you must follow.

Motorists generally have three options:

Complain directly to your lender

The FCA have released a free template complaint letter that can be amended by the consumer and sent to their lender. This does not involve paying a third party and may be more appropriate for those happy to keep control of the process.

Use a regulated claims management company

Some motorists choose to use an FCA-authorised claims management company if they would prefer professional assistance throughout the claims process. These businesses typically operate on a No Win, No Fee basis, meaning a success fee is only payable if a claim succeeds.

Seek legal advice

Others may decide to instruct a solicitor, particularly if their circumstances involve issues beyond the FCA's proposed compensation scheme.

The most appropriate route will depend on an individual's circumstances, confidence and personal preference.

The Compensation Scheme Has Not Changed

The FCA's awareness campaign does not introduce any changes to the regulator's Motor Finance Compensation Scheme.

The scheme, announced earlier this year, remains partially suspended while legal challenges brought by several lenders continue through the Upper Tribunal [4].

Although firms are not currently required to calculate or make car finance compensation payments, they are continuing preparations so the scheme can move forward once the legal process concludes.

Although the possibility of payouts 2026 is slim, many motorists are still looking ahead to potential payouts, when compensation payments are expected to begin if the remaining legal issues are resolved.

Who Could Be Eligible?

The FCA's review relates to historic commission arrangements used in motor finance agreements entered into between 2007 and 2024.

Consumers who believe they may have been affected by car finance mis-selling or mis-sold PCP car finance may wish to review their finance agreement or consider whether they have grounds to complain.

Drivers considering PCP claims should remember that the FCA's latest campaign is intended to help consumers understand their available options rather than encourage one route over another.

Whether someone is making PCP finance claims, exploring a possible PCP compensation claim, PCP refund, or carrying out a PCP claim check, the regulator's free guidance is available alongside professional support services should consumers decide they would prefer assistance.

Similarly, motorists looking for a car finance refund check can access information through the FCA's website before deciding how they wish to proceed.

FCA Continues Consumer Awareness Efforts

The latest campaign forms part of the regulator's broader work to improve consumer awareness as the UK's largest motor finance redress programme moves closer to implementation.

Earlier this year the FCA also increased its activity against misleading financial promotions [5], with hundreds of motor finance advertisements having to be amended or withdrawn where they were considered to risk giving an incorrect or misleading impression to consumers about the claims process.

The regulator has repeatedly emphasised that consumers should understand the options available to them before deciding how to pursue a car finance refund or potential car finance compensation.

What Should Motorists Do Next?

For motorists who think they may have been affected by the car finance scandal, the first step is understanding the finance agreement they entered into and whether it may fall within the scope of the FCA's review.

Consumers are free to complain directly using the FCA's template letter, seek independent legal advice or instruct an FCA-regulated claims management company if they would prefer professional assistance.

Whichever route they choose, motorists do not need to take any additional action because of the FCA's advertising campaign itself. Instead, the campaign is intended to ensure consumers understand their rights, the support available and the different ways they can pursue car finance claims as the compensation process continues.

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References:

1. Running across television, radio, newspapers, billboards and social media until 6 September, the campaign directs consumers to free resources on the FCA's website - https://www.fca.org.uk/news/press-releases/fca-launches-nationwide-car-finance-campaign
2. around 12.1 million finance agreements potentially falling within the scope - https://www.fca.org.uk/publication/policy/ps26-3.pdf
3. According to research commissioned by the regulator, more than a quarter of motorists said they lacked the confidence to complain directly without using a claims management company or solicitor - https://ca.finance.yahoo.com/news/motor-finance-customers-not-pay-230100606.html
4. The scheme, announced earlier this year, remains partially suspended while legal challenges brought by several lenders continue through the Upper Tribunal - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended
5. the FCA also increased its activity against misleading financial promotions - https://www.thesun.co.uk/money/39776013/regulator-launches-car-finance-crackdown/