The Financial Conduct Authority (FCA) has announced a significant acceleration of its planned compensation scheme for millions of motorists who were mis-sold car finance deals.
Deadline Moved Forward for Millions
The financial watchdog has brought forward a crucial deadline by two months. Motor finance firms must now begin dealing with complaints related to unfair commission arrangements by 31 May 2026, instead of the original date of 31 July 2026.
This move comes as the FCA continues to consult on the final details of a major redress scheme, expected to launch early next year. The scheme will cover drivers who entered into car finance agreements between 2007 and 2024 and were not properly informed about commissions paid to brokers.
Who is Eligible for a Payout?
You are likely due compensation if your car finance deal contained a Discretionary Commission Arrangement (DCA). Under these now-banned agreements, brokers and car dealers could secretly increase the interest rate on a customer's loan to earn themselves more commission.
Other deals that may qualify include those with a high commission arrangement, or where a broker failed to disclose they were working exclusively with one lender. The FCA estimates that over 14 million finance deals could be in scope, with the average driver receiving around £700 in compensation.
How and When to Make Your Complaint
The FCA has confirmed that the handling of these complaints, which was paused in January 2024, must now resume. Firms need to start sending final responses to motor leasing complaints from 5 December 2025, following standard complaint rules.
The regulator strongly urges consumers not to use paid claims management companies or lawyers. You can make a complaint yourself for free by contacting the lender you made your monthly payments to. Those who have already submitted a complaint are likely to receive compensation faster once the scheme is operational.
Consumer champion Martin Lewis has advised that submitting a complaint now can be beneficial, especially for older cases where financial records may be at risk. It acts as a marker to ensure your case is reviewed.
The FCA stated: “It is important that complaints are now dealt with promptly, not least as some consumers have been waiting almost two years for an answer. We are clear that complaints cannot be paused indefinitely.” The total compensation bill for lenders could reach an estimated £8.2 billion.
