Motor finance: Preparing for the FCA’s next steps

6 June 2025

On 5 June 2025, the FCA released a statement outlining key considerations for implementing a potential consumer redress scheme related to Discretionary Commission Arrangements (DCAs) in motor finance. This follows the Court of Appeal’s 2024 ruling, which deemed such commissions unlawful without informed customer consent, a decision currently under appeal at the Supreme Court.

The regulator emphasised that any redress scheme must strike a balance between fairness to consumers and the stability of the motor finance market. They are considering both opt-in and opt-out models, aiming to streamline the process and reduce reliance on claims management companies. The regulator plans to confirm its approach within six weeks of the Supreme Court’s decision.

Operational readiness: Key considerations

Firms should proactively prepare for potential regulatory actions by:

  • Identifying affected customers: Review historical data to determine which customers may be impacted by DCAs.
  • Enhancing processes and training: Ensure that procedures are compliant and teams are adequately trained to handle potential redress activities.
  • Developing communication strategies: Plan for clear and effective customer outreach across multiple channels.
  • Scaling operational capacity: Assess and plan your resource to manage increased workloads efficiently.
  • Leveraging Technology: Implement automation and reporting tools to streamline workflows and ensure accurate reporting to regulators and stakeholders.

How Momenta can assist

With extensive experience in regulatory compliance and remediation projects, Momenta offers tailored solutions to help motor finance firms navigate the latest regulatory challenges:

  • Regulatory expertise: Guidance on designing and implementing compliant redress programs.
  • Technology integration: Deployment of automation and AI tools to enhance efficiency and accuracy.
  • Proven execution: A track record of delivering successful remediation projects from inception to completion.

Momenta has delivered over 50 remediation projects from start to finish, driving timely and accurate results. Our team mobilises resources quickly, ensuring efficient and compliant project execution so that you can focus on core business priorities.

Get ahead with Momenta

As the industry awaits the Supreme Court’s ruling, proactive preparation is crucial. Engaging with experienced partners like Momenta can ensure that your firm remains compliant, resilient, and ready to act.

No matter where your firm is on the journey, get in touch with us to ensure that your business gets it right first time.