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Last updated: March 2026. This page is updated within 24 hours of every significant development in the FCA car finance investigation. Bookmark it to stay informed.
The story of the FCA car finance investigation spans more than five years, involves multiple legal battles all the way to the Supreme Court, and will result in what is expected to be the UK's largest consumer financial redress exercise since PPI. Here is the complete timeline.
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January 2021: The FCA Bans Discretionary Commission Arrangements
The Financial Conduct Authority bans discretionary commission arrangements (DCAs) in motor finance through Policy Statement PS20/8. From this date, lenders can no longer allow dealers to set customer interest rates on a discretionary basis. Commission can still be paid, but it must be at a fixed rate independent of the interest charged. The ban is the first official acknowledgement that the DCA model created an unacceptable conflict of interest for consumers.
January 2024: The FCA Launches a Formal Investigation
Following a Financial Ombudsman Service ruling against Barclays Partner Finance over a DCA complaint, the FCA launches a formal, sector-wide investigation into historical motor finance commission practices. The regulator uses its enhanced investigatory powers to demand data from major lenders. Around 2.5 million customer complaints are submitted in the months that follow. FCA Chief Executive Nikhil Rathi says it is "improbable" the investigation will find nothing to report.
May 2024: Investigation Findings Delayed
The FCA announces that the results of its investigation — originally expected in September 2024 — will be delayed to May 2025. Reasons given include firms struggling to provide complete data and a legal challenge launched by Barclays against the FOS ruling.
October 2024: The Court of Appeal Ruling
The Court of Appeal delivers a landmark ruling in cases brought against Close Brothers and Motonovo (FirstRand Bank). The court rules that it was unlawful for car finance companies to pay or receive commission without the customer's fully informed consent. Critically, this principle is applied to all commission types — not just DCAs. The ruling more than doubles the number of people potentially eligible to claim.
December 2024: FCA Extends the Complaint Pause to All Commission Types
Following the Court of Appeal ruling, the FCA extends the pause on complaint handling — previously limited to DCA cases — to all motor finance commission complaints. This gives lenders more time to prepare for a wider-than-expected redress exercise. The pause is extended until at least 4 December 2025.
March 2025: FCA Confirms Plans for a Redress Scheme
The FCA confirms that it will consult on an industry-wide redress scheme for motor finance customers. The regulator commits to publishing the next steps for complaints within six weeks of the Supreme Court's anticipated decision.
April 2025: Supreme Court Hears the Appeal
Close Brothers and Motonovo appeal the Court of Appeal ruling to the UK Supreme Court. The Supreme Court hearing takes place in April 2025. The financial services industry, consumer groups, and millions of affected customers await the outcome.
August 2025: The Supreme Court Rules
The Supreme Court delivers its judgment. It partially modifies the Court of Appeal ruling: a hidden commission arrangement is not automatically unlawful, but can be unlawful where a range of factors make it unfair. For DCA cases — the core of the FCA investigation — this standard is widely expected to be met. The FCA confirms it will proceed with the redress scheme.
October 2025: The FCA Publishes Its Redress Scheme Consultation
The FCA publishes a detailed consultation on the proposed motor finance redress scheme. The scheme is expected to cover approximately 14 million agreements and pay out an estimated £8 billion in total. Average individual payouts are confirmed at approximately £700 per agreement. The consultation closes in November 2025.
March 2026: FCA Confirms Final Scheme Rules
The FCA confirms final rules for the motor finance redress scheme will be published by the end of March 2026. An implementation period of three months (up to five months for older agreements) will follow. The FCA also confirms a £1 million public awareness campaign to ensure consumers know their rights and know they can claim without using a CMC. Customers who have already complained will be contacted first once the scheme begins processing claims.
Expected: Mid 2026 — Lenders Begin Contacting Affected Customers
After the implementation period, lenders will begin identifying eligible customers and issuing compensation offers. Customers who have already submitted formal complaints should receive their assessment within three months of the implementation period ending.
Expected: Late 2026 and Beyond — Compensation Payments
First compensation payments are expected in late 2026 for customers who have already complained. Customers contacted directly by their lenders under the scheme will receive offers and begin receiving payments on a rolling basis. The scheme is expected to run through 2027 given the scale of the exercise.
What to Do Right Now
The most important step you can take today is to submit a formal complaint to your car finance lender. Customers who have complained before the scheme launches are prioritised. PCP Missold can submit that complaint on your behalf and manage your claim through the full redress process.
