Motor Finance Remediation: Preparing for the FCA’s Next Steps

The Financial Conduct Authority (FCA) has signalled a pivotal shift in the motor finance sector, confirming that an industry-wide redress scheme is under consideration should systemic customer harm be identified in relation to Discretionary Commission Arrangements (DCAs).

This marks a critical moment for motor finance providers. The regulator appears ready to move away from a complaints-led model toward a proactive, redress-led approach—intended to simplify outcomes for consumers while creating greater predictability for firms.

With the Supreme Court hearing scheduled for 1–3 April 2025, firms should not wait for a final ruling to act. Strategic preparation is now a business imperative

Key Priorities for Motor Finance Firms

Drawing on our team’s deep expertise in financial remediation—including PPI, Section 166 reviews, and regulatory response programmes—we recommend immediate focus on five essential areas:

1. Identify and Understand the Impacted Population

• Develop robust methodologies to identify potentially affected customers, including those with closed accounts or agreements sold to third parties.

• Address data quality and completeness early—gaps and inconsistencies in records can significantly hinder remediation execution.

  
  

2. Develop a Scalable and Flexible Redress Strategy

• Build flexible models that account for:

  • Financial provisioning

  • Tax and accounting treatment

  • Varying degrees of regulatory intervention

• Scenario planning is critical to ensure operational and financial resilience under multiple outcomes.

  
  

3. Strengthen Governance and Operational Readiness

• Define a clear operating model with senior accountability, embedded governance, and end-to-end oversight across compliance, delivery, and customer outcomes.

• Establish early MI reporting across key indicators such as throughput, productivity, customer contact, and cost-to-serve.

  
  

4. Design a Transparent and Cohesive Customer Communication Strategy

• Begin shaping the customer journey now, including:

  • Communication templates for letters, emails, and digital content

  • Training and scripts for frontline teams handling enquiries

  • A strategic approach to online updates and CMC engagement

• Ensuring clarity, fairness, and consistency will help build trust and reduce reputational risk.

  
  

5. Leverage Technology to Enable Efficient, Large-Scale Delivery

• Evaluate whether existing systems can support high-volume redress activities:

  • Workflow and case management

  • Data integration and payment processing

  • Automated decision-making and tracking

• Intelligent automation and agentic AI can accelerate segmentation, case triage, redress calculation, and customer outreach—reducing cost and complexity.

  
  

Anticipated Challenges of a Redress-Led Approach

A sector-wide remediation programme introduces challenges that go well beyond typical complaints-handling. Key risks include:

• Incomplete or poor-quality data, particularly where accounts are historic or held by third parties

• Lack of consistency across redress methodologies, potentially confusing consumers and attracting regulatory concern

• Operational pressure from complaint spikes, DSARs, and ongoing monitoring

• Heightened scrutiny from the FCA, requiring rigorous documentation, governance, and reporting standards

  
  

How Profexx Partners Can Help

Profexx Partners brings together decades of regulatory remediation experience with AI-enabled delivery models designed for the scale and complexity of motor finance redress. Our solutions are:

• Rapid to deploy – enabling timely mobilisation ahead of FCA timelines

• Cost-efficient – reducing fixed overheads through automation and streamlined processes

• Modular and adaptable – built around your organisation’s data, systems, and customer needs

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We work with firms to build sustainable, compliant, and reputationally safe solutions to the sector’s most complex challenges.

To find out how Profexx Partners can support your remediation strategy, get in touch:

Website: www.profexxpartners.co.uk

Email: admin@profexx.co.uk

Phone: 07828 765147