FCA to consult on motor finance compensation scheme

On August 3, 2025, the Financial Conduct Authority issued an update regarding FCA to consult on motor finance compensation scheme. The announcement follows a landmark Supreme Court ruling that some motor finance firms broke the law by not providing customers with relevant information about commission paid by lenders to car dealers. The FCA plans to establish a compensation scheme for affected consumers, with estimated costs ranging from £9 billion to £18 billion, and aims to provide clarity and certainty for consumers, firms, and investors as quickly as possible.