What does the FCA car finance review mean for your claim?
The FCA car finance review found that many lenders and dealers paid commission that was not properly disclosed to customers. Following the Supreme Court ruling of 1 August 2025, the FCA confirmed an industry-wide redress scheme (Policy Statement PS26/3, 30 March 2026). If you took out qualifying car finance between 6 April 2007 and 1 November 2024, you may be entitled to redress — though the scheme is currently under legal challenge and timescales are uncertain.
You can complain to your lender directly for free, and you do not need a claims management company to take part in the scheme.
The 2025 Supreme Court ruling and the FCA redress scheme
This section was last reviewed on 8 June 2026. The legal position has changed significantly since this review began, so it is important to understand what has actually been decided.
On 1 August 2025, the Supreme Court handed down its judgment in the joined cases of Hopcraft, Johnson and Wrench ([2025] UKSC 33). The court mostly sided with the lenders. It held that car dealers acting as credit brokers are generally not fiduciaries of their customers, and it dismissed the bribery and secret-commission claims. In doing so, it overturned the October 2024 Court of Appeal decision that had suggested dealers owed a fiduciary duty.
The Supreme Court upheld only one narrower claim — Mr Johnson's — on the basis that the relationship was an "unfair relationship" under section 140A of the Consumer Credit Act 1974. This is an important distinction: the ruling did not confirm that all car finance was mis-sold, and it did not create automatic, blanket payouts. Instead, redress is being delivered through the FCA's structured scheme rather than through the courts case by case.
Following the ruling, the FCA confirmed an industry-wide redress scheme in Policy Statement PS26/3 on 30 March 2026 (FCA, 2026). The key features are summarised below.
| Feature | Detail (FCA PS26/3, 2026) |
|---|---|
| Scheme type | Industry-wide, free to participate in; you do not need a claims firm |
| Legal basis | s.140A Consumer Credit Act 1974 (unfair relationship); not fiduciary/secret commission |
| Products covered | Car, van, motorbike and campervan HP and PCP agreements |
| Eligibility window | 6 April 2007 to 1 November 2024, split at 1 April 2014 |
| Commission types covered | Discretionary commission arrangements (DCAs), high-commission arrangements and undisclosed ties — not DCA-only |
| Estimated eligible agreements | About 37% of agreements (~12.1 million) |
| Average redress | About £830 per agreement (£829 in PS26/3) — an FCA average that varies widely; some receive nothing |
| Estimated total redress | About £7.5bn redress (~£9.1bn including firms' costs) |
| Payment timing | Once you accept an offer, the lender must pay within 1 month |
| Current status | Under legal challenge — payouts are expected to be delayed |
Important: the scheme is under legal challenge
A legal challenge to the scheme was filed in around early May 2026, and an Upper Tribunal hearing is unlikely before October 2026. The FCA has said this will delay payouts. For that reason, no one can currently tell you that payments are happening now or give you a firm payout date. Be cautious of any firm that promises fast or guaranteed money.
Background: why did the FCA get involved?
The Financial Conduct Authority (FCA) is the UK's financial regulator. Its job is to protect consumers and ensure that financial markets work fairly.
For years, consumer groups and financial journalists raised concerns about how car finance was being sold in the UK. The core issue was commission: dealers who arranged finance agreements were receiving commission from lenders, and in some arrangements the amount of that commission was directly linked to the interest rate the customer was charged. In many cases the existence and size of that commission was not clearly explained to the customer. The FCA decided this warranted a formal review.
What the FCA investigated
The FCA's work initially focused on Discretionary Commission Arrangements (DCAs). Under a DCA, the lender set a base interest rate but allowed the dealer to adjust it upwards, earning more commission the higher the rate went. The review later broadened to consider other commission models, including high-commission arrangements and undisclosed ties between dealers and lenders.
The review looked at:
- How widespread commission arrangements were across the motor finance industry
- Whether consumers were adequately informed about commission
- The scale of any financial harm caused to UK drivers
- What form of redress, if any, would be appropriate
What the FCA found and decided
DCAs were banned in 2021
The FCA banned Discretionary Commission Arrangements on 28 January 2021. Since that date, lenders can still pay commission to dealers, but the amount can no longer be linked to the interest rate charged to the customer. Importantly, the redress scheme reaches further than DCAs alone and back to 1 November 2024, because it also covers high-commission arrangements and undisclosed ties.
Complaint handling was paused, then a scheme was confirmed
While the legal position was uncertain, the FCA paused the normal complaint-handling timetable for motor finance commission complaints. (The widely reported 28 January 2024 date relates to that complaint-handling pause, not to an eligibility cut-off — a point that is often misreported.) After the Supreme Court ruling, the FCA moved to a confirmed, industry-wide redress scheme via PS26/3 (FCA, 2026), as set out above.
Who is eligible
You may be eligible if you took out a qualifying agreement between 6 April 2007 and 1 November 2024 and commission was paid. The scheme covers car, van, motorbike and campervan HP and PCP agreements. The FCA estimates around 37% of agreements (about 12.1 million) may be eligible (FCA, 2026).
Agreements that are generally covered include:
- Agreements where a DCA, a high-commission arrangement, or an undisclosed tie applied
- Agreements that have since been paid off or settled
- Agreements belonging to customers who have since died (handled by their estate)
Agreements that are generally not eligible include:
- Personal Contract Hire (PCH) leases
- 0% finance deals
- Agreements where commission was very small
- The lowest 5% of agreements by APR
- Cases already decided by the Financial Ombudsman Service or a court
What you might receive
The FCA's average figure is around £830 per agreement (£829 in PS26/3, FCA 2026). This is an average across all qualifying agreements, not a typical or guaranteed individual amount. Payouts vary widely: roughly one in three are capped, and some people will receive nothing. The FCA estimates total redress to consumers of around £7.5bn (about £9.1bn including firms' costs).
We will never tell you that you are owed a specific sum, that a payout is guaranteed, or that "everyone" is due money. Any individual outcome depends on the facts of your agreement and the scheme rules.
How to take part in the scheme
You have two routes, and the first one is free.
- Complain directly to your lender for free. You do not need a claims management company to be included in the redress scheme. The FCA scheme is designed so that consumers can take part without paying anyone.
- Use a claims management company or solicitor if you prefer. If you choose to use a firm, it will charge a fee out of any redress recovered. By FCA rules, fees are banded by the amount recovered and capped at a maximum of 36% including VAT (15%–30% plus VAT). You will receive less than if you claimed directly.
If you would like help, you can:
- Check your eligibility — use our free eligibility checker
- Submit your information — provide the basic details of your finance agreement
- We review your case — our team checks whether your agreement falls within the scheme
- Complaint or scheme registration — your details are put forward to the lender
- Outcome — if redress is offered and you accept, the lender must pay within one month; if a complaint is rejected, it can be escalated to the Financial Ombudsman Service
For a detailed step-by-step timeline, see our guide on how long a PCP claim takes.
Should you wait, or claim now?
There is no false urgency here. Because the scheme is under legal challenge, the timetable is disrupted and there is no current hard deadline being enforced. You will not lose out by complaining directly to your lender now and keeping a record of your complaint.
A few honest points to bear in mind:
- Redress is not guaranteed. The Supreme Court did not rule that all finance was mis-sold; eligibility depends on your specific agreement.
- Timescales are uncertain. Payouts are expected to be delayed pending the legal challenge (FCA, 2026).
- You can do this for free. Complaining to your lender costs nothing; a claims firm will take up to 36% including VAT.
Frequently asked questions
Does the scheme cover HP agreements as well as PCP? Yes. The redress scheme covers car, van, motorbike and campervan HP and PCP agreements where commission was paid, within the 6 April 2007 to 1 November 2024 window.
Was the Supreme Court ruling a win for consumers? No. The Supreme Court mostly sided with lenders, dismissing the bribery and fiduciary/secret-commission claims and overturning the 2024 Court of Appeal position. It upheld only a narrower "unfair relationship" claim under s.140A of the Consumer Credit Act 1974. Redress now flows through the FCA scheme, not through automatic payouts.
Do I need a claims company to take part? No. You can complain to your lender directly for free. A claims management company is optional and will charge a fee of up to 36% including VAT out of any money you recover.
When will I be paid? This is uncertain. The scheme is under legal challenge (filed around early May 2026), with an Upper Tribunal hearing unlikely before October 2026, and the FCA has said this will delay payouts. Once you accept an offer, the lender must pay within one month — but offers may not begin until the legal position is resolved.
What if my lender has gone bust? If the lender is no longer trading, the Financial Services Compensation Scheme (FSCS) may cover your claim, subject to its rules and limits.
Take action
The FCA car finance review and the 2025 Supreme Court ruling have reshaped the landscape. The result is a confirmed, industry-wide redress scheme — not blanket payouts — that is currently subject to a legal challenge and uncertain timescales.
You can check whether your agreement may fall within the scheme for free, with no obligation. Remember: you can also complain to your lender directly for free without using any firm.
Check your eligibility today to see whether your agreement may qualify. You can also read about our services or contact us with any questions. If you choose to use us, we work on a no win, no fee basis, with fees capped at a maximum of 36% including VAT in line with FCA rules.
