Information for firms on motor finance complaints 

The Scheme Implementation Plan must set out your approach to scheme delivery, including:

• Data collection (including broker engagement and FRNs).
• Case grouping and cohort‑based decision‑making (for example to exceptions or exclusions from the scheme).
• Use of automated processes.
• Any outsourcing arrangements.
• Assurance of outcomes, prevention and detection of scams.
• Handling of multiple representatives.

Key communications to consumers are as follows:

• Provisional redress decisions.
• Redress determination.
• Opt-in invitations to consumers who have not already complained, confirming they are in scope of the redress scheme.
• Opt-in reminders to non-responders.
• Acknowledgement of opt-in.
• Acknowledgement of challenge to provisional redress decision.  

Full details of consumer communications can be found in chapter 9 of the Policy Statement.

You should ensure that all consumer communications contain the key details as outlined in the PS and the Rules (CONRED 5 (PDF) and CONRED 6 (PDF)) and that they are in line with relevant consumer communications requirements.  

Information on tied arrangements can be found in PS26/3. Should you have any questions concerning a tied arrangement or need additional guidance, please contact [email protected], or your named supervisor.

We set out in our October 2025 Dear CEO letter (PDF) that we expected lenders to address any gaps in records swiftly. Where records were incomplete, we stated that lenders should take early steps to identify the types and volumes of information they may need from brokers and start engaging with them collaboratively and promptly.  

We also stated that we expected brokers to start taking early steps to prepare for potential requests from lenders to support swift resolutions.  

All firms should continue to work in a collaborative and prompt manner to ensure the swift payment of compensation and conclusion of motor finance commission complaints.  

Where firms experience challenges working together, we expect you to tell us promptly and to provide information about the issue, the steps you have taken and any impact on your ability to process cases under the scheme.  

Firms are expected to engage with us in an open and cooperative way in line with Principle 11 of the Principles for Business. This includes responding promptly to information requests, engaging proactively where issues arise, and notifying us at the earliest opportunity of any matters that could materially affect progress with complaints or delivery of the scheme 

Authorised firms must meet our Threshold Conditions and Principles, which require firms to have appropriate resources (see COND 2.4 Appropriate resources and PRIN in our Handbook). We set out more detail in our framework for assessing adequate financial resources (FG20/1), including the need to cover potential redress liabilities.

• We expect you to undertake an assessment of whether your firm’s financial resources are adequate. This assessment should be proportionate to the scale and complexity of your regulated activities. The assessment is expected to be forward looking and must consider the risks, and potential liabilities, your firm is exposed to, including any potential redress liabilities.
• We expect you to analyse the impact of making any capital reduction, such as dividend payments, on your firm’s ability to meet potential future liabilities that may arise.
• Accounting standards generally require firms to make provision or recognise a contingent liability in their financial statements for liabilities of uncertain timing and/or amount. You should ensure that your financial statements are accurate and up to date. This includes considering issues relevant to your firm. For example, relevant Financial Ombudsman decisions that may impact your firm, pertinent court judgments and any other issues identified from your internal review. You should engage external auditors where required.
• Under Principle for Businesses 11, we expect regulated firms to deal with us in an open and cooperative way. That includes disclosing anything we would reasonably expect to know. More detailed rules and guidance are set out in SUP 15. You must immediately notify us if you’re unlikely to have adequate financial resources in the next 12 months, and before you take action that could materially impact capital positions or any other decisions which could result in serious detriment to a consumer.
• If your firm is part of a wider group, we expect you to engage with relevant group stakeholders to ensure that they fully understand the possible impact on your firm and additional financial support is secured, if appropriate.
• We’ll monitor financial resources held by your firm through the motor finance scheme reporting, ongoing supervisory engagement and supplement with additional data requests, where necessary. We may use our regulatory tools to intervene if we find your firm has not undertaken any assessment of adequacy of financial resources or may be at risk of not having adequate financial resources. Additionally, we’ll intervene if we identify actions that appear to be an attempt to avoid potential future liabilities.  

We are enhancing our gateway monitoring to prevent firms and individuals from avoiding potential redress liabilities or engaging in phoenixing. Our approach includes:

• Scrutinising the rationale for new applications, changes in control and cancellations.
• Assessing whether applicants have properly identified and calculated potential redress liabilities.
• Confirming they have credible arrangements to fund any future redress and have settled existing liabilities.
• Verifying all complaints are resolved before approving cancellations.
• Ensuring applicants have taken reasonable steps to minimise any adverse impact on customers.

Where firms have not taken adequate steps, we may require further action such as PI insurance, customer contact exercises, third-party assurance in transfer scenarios, or reviews of high-risk business and payment of redress. Firms may also use deed polls where they are confident in the quality of past services, allowing responsibility for historic activity to transfer to the new firm. Applicants that do not engage appropriately will face increased scrutiny and may have their applications refused.

We expect firms to manage redress liabilities in line with our rules. We scrutinise redress provisions, challenge firms on actual and potential liabilities, and use data to identify risks such as phoenixing and other polluter behaviours. Where firms fail to prevent harm, we may require them to review high-risk business, strengthen controls, or pay redress.

You should promptly identify motor finance commission complaints involving more than one professional representative and work quickly to resolve the issue, without allowing this to delay complaint handling or cause consumer detriment. Our February 2026 Dear CEO letter (PDF) sets out a suggested approach that you may wish to consider to help you find a suitable solution. More information can also be found in the FCA and SRA joint message to professional representatives on dealing with multiple representation and excessive termination fees.

All firms must nominate an SMF (or equivalent where there is no SMF) to have overall responsibility for oversight of the delivery forecast and scheme compliance.

In some circumstances, a firm may need to nominate more than one SMF, for example, where the firm has separate divisions with different systems and staff.

If you intend to have more than one SMF overseeing the scheme, you will need to do the following:

• Submit the most senior SMF details into RegData as required under CONRED 5.9.3R (2) & 6.9.3R (2).
• Email the name and contact details of the additional senior manager responsible for oversight and overall delivery of the scheme, including your reasoning for an additional SMF to [email protected].