The FCA is gearing up to run one of the UK’s biggest consumer redress schemes ever. This comes after the recent Supreme Court decision on mis-sold motor finance agreements [1]. The ruling upheld the decision that approximately 14 million drivers were mis-sold car finance between 2007 and 2021. The industry-wide process to assess and pay redress has now been set in motion.

According to recent findings cited by Slater & Gordon [2], public trust in lenders to manage this process is alarmingly low. Just 23% of consumers think finance companies will deal with payouts fairly and independently, indicating why the FCA should be on hand to oversee claims. Many lenders have already acknowledged that some customer records are missing or have been deleted, which is a serious concern when 57% of potential claimants have moved house since taking out their finance deal, and more than 8 million people have lost the relevant paperwork.

Why FCA Oversight Matters

The FCA has proposed a redress scheme that would offer a consistent, fair, transparent and standardised process for managing car finance claims. In the absence of a centralised scheme, redress decisions could vary significantly from lender to lender and many deserving consumers could miss out on getting the refunds they are entitled to.

The regulator has stressed that its priority will be to ensure affected drivers, whether they had hire purchase or PCP claims, are treated consistently. It also aims to address practical challenges such as tracing people who have moved, verifying claims without original documents, and preventing delays that could erode public confidence.

Understanding the Car Finance Scandal

The core of the car finance scandal has been Discretionary Commission Arrangements (DCAs), a sales practice where brokers could increase interest rates in exchange for higher commission from lenders. The Supreme Court ruled this was an obviously unfair practice, and a violation of the duty to act in the consumer’s best interest.

This mis-selling meant millions paid more than they should have for their car finance. For some, the overpayment ran into thousands of pounds, including interest that would not have been charged had the commission arrangements been transparent. The FCA’s role now is to ensure that any repayment includes both the excess interest and appropriate statutory compensation.

The Financial Scale of the Redress

The regulator estimates the total cost could be between £9 billion and £18 billion [3], with average payouts expected to be around £950 per agreement [4]. The consultation is scheduled to launch in early October, with schemes rolled out in time for the first payments in 2026. Such a payout would be one of the biggest in UK consumer compensation history, which means the scheme must be well-organised to operate efficiently.

The Challenge Ahead

While the FCA’s leadership is seen as a positive step, the task ahead is complex. The regulator will need to:

• Locate affected consumers – particularly those who have moved multiple times or changed contact details.
• Check claims without original paperwork – using other data and lender records.
• Resolve missing/deleted files – with lenders held accountable for reconstructing records where possible.
• Guarantee consistent payouts – prevent variations between like claims.

The sheer scale of the car finance claims in the UK shows why coordinated oversight is vital. Without it, millions may be left behind, particularly where lenders use automated tracing or passive outreach strategies.

Why Waiting Could Be Risky

Some financial commentators suggest that drivers should “sit tight” and wait for the FCA-led scheme to roll out. While this may work for those with clear records and unchanged contact details, others face real risks in delaying.

If you’re one of the 57% who have moved house since your finance deal, cannot find your paperwork, and have little faith in your lender making first contact, waiting could mean missing the window for compensation. Missing or incomplete records may also mean your claim requires proactive follow-up rather than passive inclusion in a mass payout.

Help from Claims Specialists

This is where a finance claims expert can really help. Companies like Reclaim247 specialise in tracking down old agreements, even if the client is unsure who their lender was and has no paperwork. As the company states:

“If you’re unsure who your lender was, can’t find paperwork, or just want someone to fight your corner, Reclaim247 can help. All we need is your name, address, and date of birth. No paperwork. No car reg. No win, no fee. Start your claim in 60 seconds at Reclaim247.co.uk. Reclaim247 is FCA-authorised. Solicitors handle claims. Terms and eligibility.”

By working with regulated claims firms, consumers can initiate action now, without having to wait for the FCA scheme to begin. This might be particularly useful if you are worried about losing touch with deadlines or falling between cracks in the administrative process.

Staying Informed

The FCA is expected to consult on an industry-wide redress scheme [5] and publish further details in the coming months. We expect to see details released shortly about how to claim, the eligibility criteria, time limits and how much drivers can expect to be paid. In the meantime, if you are affected, it is important to stay up to date by following trusted sources such as law firms and consumer rights groups.

Reading the latest updates on car finance claims in the UK is one way to ensure you don’t miss important announcements that could affect your entitlement.

The Bottom Line

The FCA taking on a role in the car finance scandal resolution is a positive indication that it will be more equitable and transparent than if the lenders were left to it alone. But logistical and practical challenges suggest it could be months before the scheme is fully up and running. For those keen to get their refund without delay, or who are concerned their records will not be complete, then going down the route of an individual claim via a regulated firm may be the safest option. Whether through the FCA-led scheme or with help from a claims specialist, the key is to act from an informed position, understand your rights, and ensure you are not one of the millions left uncompensated.

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1. Supreme Court decision on mis-sold motor finance agreements - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
2. recent findings cited by Slater & Gordon - https://www.slatergordon.co.uk/newsroom/consumers-trust-the-financial-conduct-authority-to-resolve-the-car-finance/
3. £9 billion and £18 billion - https://www.reuters.com/business/finance/uks-fca-proposes-9-billion-18-billion-pound-redress-scheme-motor-finance-claims-2025-08-03/ 
4. average payouts expected to be around £950 per agreement - https://www.theguardian.com/business/2025/aug/04/who-will-get-car-loan-payout-how-much-regulator
5. consult on an industry-wide redress scheme - https://www.fca.org.uk/news/press-releases/fca-consult-motor-finance-compensation-scheme