The FCA redress scheme, and your next steps

Thursday 2nd April 2026: 09.30 1 hour

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A summary of the FCA’s final motor finance redress scheme, early analysis and lots of time for comprehensive answers to listeners’ questions.

• David Betteley, head of auto finance, Finance Connect
• Wayne Gibbard, partner, Shoosmiths and legal adviser to Finance Connect
• Edward Peck, CEO of Finance Connect

The FCA published PS26/3 on 30 March 2026, setting out the final framework for redressing consumers who were overcharged through discretionary commission arrangements on motor finance agreements between 2007 and 2024. The total bill to firms comes in at £9.1 billion — down from £11 billion at consultation — with 12.1 million eligible agreements, reduced from 14.2 million.

The biggest winners are manufacturer captives and tied lenders: arrangements with an easily recognisable tie between lender and dealer brand are explicitly carved out as fair, with no redress liability in respect of the tied arrangement. Independent lenders face the harder picture — broad scope, firm-led outreach obligations, and tight delivery timelines running to end 2026 and end February 2027 respectively.

The surprise was the two-scheme structure itself, designed to future-proof the scheme against legal challenge while allowing better-evidenced post-2014 cases to progress quickly — and a greater degree of operational flexibility for firms than most anticipated, including more targeted consumer communications and the removal of recorded delivery requirements.

• Assess your firm’s position under the final rules — where the exemptions apply, where they don’t, and what your actual liability looks like now that scope and costs have been revised downward from consultation.
• Identify the immediate priorities — delivery plan submission, outreach sequencing, and senior manager attestation — so you know what requires a decision in the next few weeks and what can wait for further FCA guidance.
• Submit your questions in advance by writing to edwardpeck@finance-connect.com — the agenda will be shaped by what the industry is actually wrestling with, not a generic walk through the policy statement.

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