The Financial Conduct Authority’s Consultation Paper CP25/27 proposes an industry-wide redress scheme for UK motor finance customers who may have been unfairly charged due to inadequate disclosure of commission arrangements between lenders and brokers. Covering agreements from 6 April 2007 to 1 November 2024, the scheme targets practices such as Discretionary Commission Arrangements (DCAs) and high or exclusive commissions that may have breached FCA principles. It is expected that the compensation scheme ...

For the transactions that meet that criteria, lenders calculate the consumer’s compensation in one of the several ways. For most cases, the compensation will be based on an average of the amount overpaid and the commission paid, plus base rate interest plus 1%. However, in the rarer but most extreme cases, such as the one that triggered the Johnson v FirstRand Bank Ltd case, the lender must pay the consumer the commission plus interest.Consumers will be eligible if they took out a regulated motor finance ag ...

The FCA’s proposed motor finance redress scheme has landed, and with it, a hefty price tag. The regulator estimates £8.2 billion in compensation for customers, plus an additional £2.8 billion in implementation costs, bringing the total industry bill to around £11 billion. The Finance & Leasing Association (FLA) isn’t convinced. Chief executive Shanika Amarasekara said the figures “remain too high” with the FLA's Adrian Dally also calling for transparency on how the FCA arrived at them. The consultation do ...

The UK's Financial Conduct Authority (FCA) has put forward a proposal for a compensation scheme under which payouts related to an anticipated 14 million unfair motor finance agreements may commence next year. This scheme, if approved, is set to disburse an estimated £8.2bn ($11bn) to consumers who were disadvantaged by nondisclosure of critical information in their finance agreements. The reported lack of transparency has prompted FCA to suggest average payouts of about £700 per affected agreement. Rese ...

The Finance & Leasing Association (FLA) has urged caution following the Financial Conduct Authority’s (FCA) publication of its long-awaited consultation on a sector-wide redress scheme for motor finance customers, warning that the costs “remain too high” and that the detail will require “much scrutiny” before firms can assess the full operational and financial impact. The 360-page consultation sets out how the regulator proposes to deliver compensation for consumers who were charged unfairly under commiss ...

Core Insights - Vehicle Asset Solutions (VAS) and jaam automation have launched an AI-powered Attestation and Audit Portal to improve oversight in the UK motor finance industry [1][5] - The portal aims to streamline compliance processes and reduce administrative burdens for finance providers, dealers, and brokers [1][2] Compliance Enhancement - The platform includes two main services: the Motor Finance Oversight Attestation, a self-assessment tool for brokers and dealers, and the Motor Finance Oversight Audit, which can be conducted virtually or in person [2][3] - The Attestation tool generates a report on regulatory health for funders, while the Audit provides a comprehensive review based on scheduled or risk-triggered assessments [2][3] Strategic Compliance Asset - VAS managing director Paul Neal emphasized that the platform serves as a strategic compliance asset, enabling funders to maintain meaningful oversight and improve industry standards through structured best practices [3][4] - Funders can utilize the system to benchmark their networks against compliance standards, including Consumer Duty and Commission Disclosure [4] Collaborative Workflow - The portal integrates various stakeholders—dealers, brokers, funders, and the VAS quality assurance team—into a collaborative environment [4] - AI-driven attestations are organized through an intelligent tasking system that includes scoring and collaboration tools [5] Digital Transformation - jaam automation's co-founder Andrew Murphy highlighted that the platform represents a significant digital transformation for the industry, combining automation, AI, analytics, and oversight tools to manage regulatory risk effectively [5]