With the FCA’s Dear CEO letter and the consultation on an industry‑wide compensation scheme now live, the question isn’t whether lenders must act — it’s whether you’ll act fast enough to control the narrative.
Here’s what matters—just the essentials: dates, thresholds, formulas, and an outsourced programme ready now.
Consultation window
Six weeks, feedback by 18 November 2025. The FCA aims to publish final rules in early 2026.
Scope
Regulated motor finance lending between 6 April 2007 to 1 November 2024.
A customer is in scope and eligible if one or more apply and adequate disclosure wasn’t provided at sale:
- Discretionary Commission Arrangement (DCA).
- High commission: commission ≥ 35% of total cost of credit and ≥ 10% of the loan amount.
- Tied dealer arrangement (exclusivity or first right of refusal). This can catch certain non‑DCA models (e.g., revenue share) if the thresholds/“tied” test are met.
Rebuttal
Lenders may rebut if disclosure was adequate, and for DCAs, if the broker selected the lowest available rate that earned no extra commission. Adequate disclosure would need to be demonstrated using plain English with clear and prominent information about the arrangement before the customer entered the loan; tiny print or vague “we may receive commission” statements wouldn’t suffice unless attention was explicitly drawn.
Dear CEO milestones
5 December 2025: eight‑week final‑response timelines resume for leasing complaints.
31 July 2026: final‑response deadline for motor finance commission complaints; investigations must continue now.
Customer contact model (hybrid)
- Prior complainants: contact within 3 months of scheme start; automatically included unless they opt out.
- Non‑complainants: contact within 6 months; invited to opt in.
- Self‑referral: customers not contacted may request review within 12 months of launch.
Redress maths (don’t guess — calculate).
- Tier 1 (Johnson‑type): inadequate disclosure + high commission ≥ 50% of total cost of credit and ≥ 22.5% of the loan + tied arrangement. Redress is the greater of: (a) commission paid to the dealer; (b) APR adjustment amount = difference between actual cashflows and cashflows at market‑adjusted APR = Actual APR × 0.83. If a DCA and the minimum commission‑paying APR exceeds the market‑adjusted APR, use the minimum DCA APR instead.
- Tier 2 (all other eligible): redress is the higher of: (a) average of dealer commission and APR adjustment amount; (b) the APR adjustment amount.
- Simple interest: Bank of England average base rate + 1%, from overpayment to compensation date.
What the Regulator Wants
The ask from the regulator is to find the right customers, gather the right evidence, make fair decisions fast, and prove it with clean MI. Messy legacy data, scattered records, loan books sold or assigned between entities, patchy broker archives, and overloaded complaints teams? You are not alone – but you are on the clock.
The Apex Advantage: end‑to‑end operating model you can switch on now
Programme leadership that actually runs
We mobilise a lender‑side PMO in days: scope, workstreams, RACI, run‑books, change control. Senior Manager accountabilities are explicit, and there’s a SUP 15 decision-log, so surprises become notifications, not crises.
Data, records & evidence
We reconstruct loan‑book lineage and responsibilities where portfolios moved. We build evidence packs by product and vintage — commission model, disclosure artefacts, broker‑lender terms, sales journey, and decision rationale — indexed and retrievable in seconds.
Broker Engagement Desk (BED)
One front door for every broker. structured questionnaires, secure upload, SLA tracking, and escalation for non‑cooperation. We de‑duplicate requests across common brokers to cut noise and cost.
Proactive next steps
You’ll know your population and how clean your contact data really is. You’ll have the broker map you’ve always wanted and a contact plan that doesn’t create three versions of the truth. Cases will be moving — decisions issued, QA passing, redress landing. And when the FCA enquires, you’ll talk evidence and outcomes, not system limitations.
The clock is ticking to 5 December 2025. If you want this handled — and handled well — tell us where to plug in.Contact Apex Compliance Advisory
contact@apexcomplianceadvisory.com | +44 (0)207 173 5302