As scrutiny of historic motor finance commission arrangements deepens, the regulatory landscape is becoming more complex by the day. With escalating complaint volumes through 2025, increased media attention and potential industry-wide redress on the horizon, firms must be proactive assessing their readiness, whether or not they believe they are directly in scope.
So what’s happened to bring us to where we are today? Why does it matter? What practical steps can firms take now to respond to short-term challenges and prepare for a range of longer-term outcomes? These are the “no-regrets” actions: the steps that will add value by shifting from the back foot to front, regardless of the final regulatory direction. Data sits at the heart of these actions.
In its 5 June update, the Financial Conduct Authority (“FCA”) made clear that firms should not treat the complaint handling pause as a time to wait and see.1 Instead, it expects proactive preparation ahead of a potential redress scheme, which could be consulted on shortly after the Supreme Court judgment and implemented as early as 2026.2 The regulator is already engaging with stakeholders and has signalled a potentially shortened consultation window — underscoring the need for firms to be ready.3
What’s Happened?
The issue of motor finance commission arrangements has been building for some time, but events have accelerated recently. In 2024, the Financial Ombudsman Service (“FOS”) issued two long-awaited decisions on discretionary commission arrangements (“DCAs”), both of which were upheld in favour of the customer. The Ombudsman found that the structure of the commission created an inherent conflict of interest, which was not adequately disclosed, and breached regulatory expectations on treating customers fairly.4
In response, the FCA introduced temporary complaint handling rules, effectively pausing the eight-week response deadline and extending the FOS referral window.5 This gives the regulator space to conduct deeper diagnostic work, including a Skilled Person review to assess the size and seriousness of the issue.
More recently, the Court of Appeal ruled that brokers could not lawfully receive commission from lenders without the customer’s fully informed consent — a decision that applies not just to DCAs but to any undisclosed commission, including fixed commission models.6 The FCA has since extended the pause in complaint handling to non-DCA commission complaints as well.7
Firms now find themselves facing rising complaints and DSAR volumes, regulatory scrutiny and legal uncertainty — all while needing to plan for a possible industry-wide redress scheme, expected to be announced by the FCA following the Supreme Court’s decision in summer 2025.8
Lessons from the Past
FTI Consulting professionals have supported firms through some of the UK’s largest redress exercises — including PPI, IRHP, payday lending and consumer credit remediation. Across these varied programmes, a consistent set of lessons emerges.
First, data must be treated as a strategic asset. Poor-quality, fragmented or inaccessible data makes even simple remediation efforts exponentially harder. Firms that succeed in redress are those who establish a “single source of truth” early, drawing on structured and unstructured datasets, tested assumptions and repeatable logic.
Second, effective governance is essential. The best remediation programmes embed transparency, accountability and clear decision-making from the outset. Boards, senior managers and delivery teams all need visibility — not just of outcomes, but of risks, exceptions and customer fairness.
Third, speed and scale matter — but not at the expense of quality. Redress programmes must strike a balance between delivering at pace and ensuring consistency. That often means leveraging automation, case file generation tools and advanced analytics — particularly for triage, testing and audit.
Finally, firms must plan for scrutiny. Whether from the FCA, FOS, the media or the courts, remediation programmes will be interrogated. Firms must be able to evidence why they took the decisions they did, how they ensured fairness and what controls were in place to prevent errors or bias.
Why Data Analysis Is the Enabler
Data and analytics capability is no longer a “nice to have”, it is the critical enabler of defensible, and cost-effective redress. Firms that understand, harness and trust their data early will be best placed to manage complaints, satisfy regulators, and treat customers fairly.
When it comes to arrangement information, having one source of truth is crucial and has proven to be pertinent in cases. This includes commission model type and amount paid; disclosure timing, method and wording; APR and interest rates; loan amount, duration and start date; customer payment transactions and customer characteristics. This involves careful development of a robust and fit for purpose data platform that integrates multiple disparate sources from across a firm’s landscape, such as contracts, call logs, CRM and payment systems. Confidence in data accuracy is key, requiring thorough testing, analysis and documentation of source quality, extraction (including artificial intelligence (“AI”) tools and migration.
From this foundation, auditable and automated workflows can reliably identify eligible populations, validate redress calculations, enable redress payments and produce valuable management information. AI tools can be used to triage complaints, flag outliers and test outcomes against fairness metrics. Crucially, analytics supports scalability, enabling firms to go from hundreds to tens of thousands of cases without compromising consistency.
Perhaps most importantly, analytics empowers firms to engage regulators with confidence. A well-governed dataset and well documented auditable processes gives firms a credible foundation for any future discussions with the FCA or FOS.
No-Regrets Actions Firms Should Take Now
In this evolving landscape, there are a series of practical and proportional actions that firms should take now — not because they are required, but because they will future-proof firms and put them in a stronger position for any potential future upheaval.
- Develop a robust complaint handling strategy, aligned to current FCA guidance. This should include processes to identify commission-related complaints, investigate them during the pause period and prepare for rapid resolution once the deadline restarts.
- Build surge capacity across complaints and Data Subject Access Request (“DSAR”) handling. Given the continued rise in complaints, firms should explore managed service models, workflow automation and DSAR simplification strategies to reduce operational strain.
- Collate, validate and enrich customer data to support defensibility and scalability. This includes mapping historic commission arrangements into one source of truth, flagging in-scope customers and stress-testing data completeness and integrity.
- Clarify redress policy positions in advance. These include risk appetite thresholds, treatment of vulnerable customers and positions on consequential loss — all critical in the event of an FCA-led redress scheme.
- Design redress methodologies and calculators capable of handling complex scenarios, including early settlements, arrears and cases with partial disclosure.
- Plan for delivery and communications. Whether redress is proactive or complaint-led, firms should be prepared with communications playbooks, FAQs and strategies for engaging the media, customers, regulators and claims management companies.
Final Thoughts
While uncertainty remains around the final scope of redress, one thing is clear: firms that act early will be in a stronger position to protect customers, satisfy regulators, and manage their own risk. The pause in complaint handling should not be seen as a delay, instead it is an opportunity to prepare.
With strong data analytics, well-designed governance and a readiness mindset, firms can not only withstand this period of scrutiny but come out of it stronger, more resilient and more aligned with the expectations of regulators and customers alike.
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