The FCA has spoken: Compensation for motor finance customers who were treated unfairly

The Financial Conduct Authority (FCA) has proposed a redress scheme for motor finance customers who may have been treated unfairly and subsequently overpaid on car finance.

On 7 October 2025, the FCA published plans for a compensation scheme, stating that it is the best way to ensure that consumers who have lost out receive fair compensation in the most consistent and efficient way.

This announcement will have a significant effect on the whole UK motor finance industry, with funders having until mid-November to respond to the proposed scheme and the parameters that are included in it. Estimated redress currently sits at £8.2 billion.

But how did we get here? And how can we ensure we don’t arrive at this juncture again?

The Background

On 1 August 2025, the UK Supreme Court handed down a landmark decision on discretionary commission arrangements (DCAs) and fiduciary duties. The ruling confirmed that, in certain circumstances, finance providers may have entered into unfair relationships with consumers – meaning commission plus interest could be repayable. Crucially, however, the Court also decided that car dealers did not have to put consumers’ interests ahead of their own.

The fallout is significant. While some consumers may now miss out on redress, the judgment has sharpened the focus on motor finance funders. The Financial Conduct Authority has already announced plans for a compensation framework, and scrutiny of how dealers and brokers are overseen has never been greater.

Oversight Is No Longer Optional

For funders, this ruling is a call to action. Oversight of dealers and brokers – especially around commission disclosure and Consumer Duty – is not just a regulatory expectation, it’s a reputational safeguard. Yet the reality can be messy. Today, many finance houses rely on a patchwork of annual reviews, questionnaires and ad-hoc visits. Dealers and brokers are asked for the same information multiple times in multiple formats. Funders drown in admin. Nobody wins.

Why a Smarter Approach is Now Essential

That’s why Vehicle & Asset Solutions (VAS), in partnership with jaam automation, has launched the UK’s first AI-powered Attestation and Audit Portal for the motor finance sector.

The portal standardises and simplifies oversight. Funders gain a unified, real-time view of dealer and broker compliance health. Dealers and brokers only need to provide information once, through a streamlined process that reduces duplication and stress. And because attestations are AI-validated and backed by VAS’s quality assurance team, funders get actionable intelligence – not just data.

The platform combines two layers of oversight:

• Attestation – AI-enabled self-assessments completed by dealers and brokers, reviewed by VAS’s quality assurance team.
• Audit – in-depth virtual or on-site audits, triggered by sampling, risk signals or regulatory need.

The result? Funders can benchmark entire networks against FCA expectations, identify risks early and take targeted action. Dealers and brokers benefit from consistency, clarity and less admin.

Raising Standards, Reducing Risk

In the wake of the Supreme Court’s ruling, one thing is clear: the sector cannot afford to take oversight lightly. The FCA has made it plain that firms must evidence strong governance and fair treatment of customers. The VAS portal provides exactly that – a scalable, intelligent way to protect funders, support dealers and brokers and build consumer trust.

As Paul Neal, Managing Director at VAS, puts it:

“This platform is not just a tech tool – it’s a strategic compliance asset. It empowers funders to deliver meaningful oversight while reducing the pressure on dealers and brokers. Most importantly, it helps raise industry standards through structured, repeatable best practice.”

With the regulatory landscape shifting fast, the question for funders is simple: how will you prove your networks are compliant, consistent and ensuring that customers achieve the best possible outcomes?

The VAS Oversight Portal is now live. To learn more or request a demo, contact us.