A turning point in motor finance regulation
The FCA’s motor finance redress consultation is a pivotal development for firms operating in the sector. Unlike previous announcements, this consultation sets out clear expectations on how businesses should identify affected customers, calculate redress and manage remediation efficiently. Getting to grips with these updates is crucial not only to stay compliant but also to enhance operational processes, reduce financial risk and maintain customer confidence.
This was recently discussed by two of our in-house experts, TCC Group’s Chief Product and Commercial Officer, Garry Evans and Momenta’s Head of Operations, Mike Morris.
Key changes and their implications
The FCA has clarified exactly which motor finance agreements are in scope, how redress should be calculated and the expected timelines for delivery. It has placed a stronger emphasis on governance and transparency, highlighting that effective oversight is just as important as accurate financial calculations. Firms can no longer depend on broad, generic frameworks. They must implement concrete, actionable procedures to guarantee consistency, accuracy and full regulatory compliance.
The operational impact of the consultation is significant. Many firms are dealing with incomplete historical data, inconsistent workflows and gaps in cross-team collaboration. They now face the challenge of auditing records, streamlining internal processes and putting robust governance structures in place. Tackling these issues not only ensures compliance with the FCA’s requirements but also builds a foundation for stronger operational resilience and greater efficiency in any future remediation efforts.
Turning compliance into strategic advantage
The FCA’s guidance goes beyond simply avoiding regulatory penalties. It represents a broader strategic opportunity. Firms that act early and grasp the subtleties of the consultation can embed a culture of compliance while keeping customer outcomes at the forefront of operations. By showing both competence and a commitment to fairness, firms not only strengthen their operational readiness but also enhance their standing with the regulator and position themselves more favourably for future developments.
Preparing for redress
To successfully navigate the FCA’s motor finance redress consultation, firms should focus on three key areas:
- Identify agreements in scope: Review all regulated motor finance agreements to determine which customers may be entitled to redress, ensuring no gaps in coverage.
- Design effective remediation processes: Develop procedures that balance operational efficiency with accuracy in calculating and delivering redress.
- Implement robust governance and oversight: Establish clear roles and responsibilities to maintain transparency and regulatory compliance throughout the remediation process.
Firms that tackle these areas proactively will not only meet FCA expectations but also build customer trust, reduce operational risk and create a framework for future regulatory challenges.
Getting ahead
The FCA’s new motor finance redress consultation presents both challenges and opportunities. Firms can act efficiently by either leveraging our experts to guide compliance and remediation, or by using our purpose-built tech solution which is live and processing over one million cases, to handle data analysis, document review, redress calculation and customer contact. Book a free demo today to explore both options.
