Overview

• The proposed scheme covers motor finance taken out between April 6, 2007 and November 1, 2024 where commission was paid by the lender to the broker.
• Compensation would be due only where key commission features were not disclosed, including discretionary commission arrangements, high commissions (at least 35% of the total cost of credit and 10% of the loan), or exclusive ties between lender and broker.
• Based on expected participation of about 85%, the FCA estimates lenders would pay around £8.2bn, rising to up to £9.7bn in the very unlikely event of full take-up.
• The FCA says consumers should complain directly to their lender now and that they do not need to use claims management companies or law firms, which could take significant fees.
• Once the scheme goes live, lenders will prioritise existing complaints, contact other eligible borrowers within six months, and those not reached will have one year from launch to make a claim.