What is the FCA motor finance redress scheme?
The FCA's motor finance redress scheme is a free, industry-wide compensation process, confirmed in Policy Statement PS26/3 on 30 March 2026. It covers car, van, motorbike and campervan PCP and hire purchase agreements taken out between 6 April 2007 and 1 November 2024 where commission was paid. The FCA estimates about 37% of agreements (around 12.1 million) may be eligible (FCA, 2026).
This post was first published before the August 2025 Supreme Court ruling and has been updated on 8 June 2026 to reflect the confirmed scheme, the court's findings and the legal challenge now affecting timescales.
The 2025 Supreme Court ruling and the FCA redress scheme
On 1 August 2025 the UK Supreme Court handed down its judgment in Hopcraft, Johnson and Wrench ([2025] UKSC 33). The ruling mostly sided with lenders, and it is important to be clear about what it did and did not decide:
- The court held that car dealers acting as credit brokers are generally not fiduciaries of the customer.
- It dismissed the bribery and the fiduciary/secret-commission arguments, overturning the October 2024 Court of Appeal decision that had alarmed the industry.
- It upheld only one, narrower claim — Mr Johnson's case — on the basis of an "unfair relationship" under section 140A of the Consumer Credit Act 1974.
In plain terms, the Supreme Court did not rule that all car finance was mis-sold, and it did not create automatic, blanket payouts. Instead, compensation is being delivered through the FCA's structured redress scheme, which the FCA designed in response to the judgment (FCA, 2026).
Following that judgment, the FCA consulted on a redress scheme and confirmed it in Policy Statement PS26/3 on 30 March 2026. The table below sets out the confirmed scheme as it stands on 8 June 2026.
| Feature | Confirmed detail (FCA PS26/3, 2026) |
|---|---|
| Scheme status | Confirmed by Policy Statement PS26/3 on 30 March 2026 |
| Who runs it | Industry-wide scheme operated by lenders, overseen by the FCA — free to use |
| Vehicles covered | Car, van, motorbike and campervan finance (PCP and HP) |
| Agreement window | 6 April 2007 to 1 November 2024 (split at 1 April 2014) |
| Commission covered | Discretionary commission arrangements (DCAs), other high-commission arrangements and undisclosed ties — not DCA-only |
| Estimated eligibility | About 37% of agreements, roughly 12.1 million |
| Average redress | Around £830 per agreement (£829 in PS26/3) — an FCA average that varies widely; about 1 in 3 capped; some receive nothing |
| Total cost to firms | Around £7.5bn in redress (about £9.1bn including costs) |
| Payment once accepted | Lender must pay within 1 month of you accepting an offer |
| Current status | Under legal challenge (filed around 1 May 2026); the FCA has said this will delay payouts |
The scheme is under legal challenge
As of 8 June 2026 the scheme is subject to a legal challenge, filed around 1 May 2026, with an Upper Tribunal hearing unlikely before October 2026. The FCA has said this challenge will delay payouts. For that reason, no firm dates can be given for when offers will be made or paid, and you should treat any third party promising fast or guaranteed payment with caution.
What were discretionary commission arrangements?
In January 2021 the FCA banned discretionary commission arrangements (DCAs). Under a DCA, a dealer or broker could adjust the interest rate on your finance, which in turn changed their commission. The most criticised form was the increasing DCA model, where a higher rate meant more commission for the broker.
The DCA ban remains correct, but the redress scheme is broader than DCAs alone. It reaches agreements up to 1 November 2024 and also covers other high-commission arrangements and undisclosed ties between the lender and the broker (FCA, 2026).
Who is eligible — and who is not?
Potentially eligible:
- PCP and HP agreements for cars, vans, motorbikes and campervans taken out 6 April 2007 to 1 November 2024 where commission was paid.
- Agreements that have since been paid off or settled — you do not need the car or the finance to be active.
- Agreements of deceased customers may be covered.
Not eligible:
- Personal contract hire (PCH) leases.
- 0% interest deals and agreements with very small commission.
- Deals in the lowest 5% of APRs.
- Cases already decided by the Financial Ombudsman Service or a court.
The window is 6 April 2007 to 1 November 2024. Some earlier coverage referred to a 28 January 2024 date — that was the FCA's temporary pause on complaint handling, not the eligibility cut-off, and it should be disregarded.
What does this mean for you?
If you took out car or vehicle finance between 6 April 2007 and 1 November 2024 and commission was paid, your agreement may fall within the scheme. It does not mean you are automatically owed money, and it does not mean a particular amount is due to you. The roughly £830 figure is an FCA average per agreement — it varies widely, around 1 in 3 cases are capped, and some people will receive nothing (FCA, 2026).
The Supreme Court ruling and the FCA scheme do not confirm that all finance was mis-sold. Whether any redress is due depends on the facts of your individual agreement.
How to complain — for free
You can complain directly to your lender for free and you do not need a claims management company to take part in the redress scheme. Complaining yourself costs nothing and does not reduce any redress you may receive.
If you choose to use a claims company or solicitor, their fees are banded by the amount recovered and are capped at a maximum of 36% including VAT (broadly 15%–30% plus VAT), in line with FCA rules. A firm cannot lawfully charge more than this, and using one is optional.
A few things to keep in mind:
- Taking part is free and you can do it yourself.
- Any redress is not guaranteed and depends on your individual circumstances.
- The scheme is under legal challenge, so timescales are uncertain and no hard deadlines apply.
How to check if your agreement may be in scope
The simplest way to understand whether your agreement may fall within the FCA scheme is to check the key facts: the dates, the type of finance and whether commission was paid. Our free assessment helps you work through this — and you remain free to complain directly to your lender at no cost at any time.
Start your free eligibility check — it takes less than two minutes.
This article is for general information only and is not legal or financial advice. Details reflect the FCA's confirmed scheme (PS26/3, 2026) as at 8 June 2026 and may change, particularly given the ongoing legal challenge.
