The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

Firms should focus on ensuring that they are institutionally ready for a potentially significant consumer remediation exercise. The time to prepare is now.

1. Understand your data sources, gaps, and integrity

Data is central to any redress scheme. Firms will need to determine whether customers were harmed by commission arrangements paid during a yet to be defined “Relevant Period” and calculate redress accordingly. This requires a thorough understanding of historical data.

Key considerations include:

• Identifying necessary data points (e.g., commission structures, disclosures).
• Locating and assessing data storage formats (digital, archived, hard copy).
• Assessing data integrity and addressing data gaps and inconsistencies.
• Building a verified contact list of affected customers, including tracing for those who have moved or passed away.

Given the long lead time, delays due to poor data management will likely receive little regulatory sympathy.

2. Redress process design is iterative and takes time

Designing a redress process is not a one-off task - it is a dynamic, evolving process. The FCA has indicated that any scheme will be principles-based, requiring firms to tailor approaches to their specific commission models and customer demographics. Initial frameworks will evolve through collaboration with the FCA to define what constitutes fair redress.

3. Scope and eligibility: plan for multiple scenarios

Defining who is in scope and eligible is complex:

• Scope: Whether a complaint relates to a Relevant Commission Arrangement (i.e. a commission that is subject to the FCA's review for potential redress) (RCA) during the Relevant Period.
• Eligibility: Whether the complainant is entitled to redress (e.g., is the complaint brought by an original customer, legal representative, or claims management company, or within the definition of a Relevant Customer - i.e. an eligible customer of a Firm who has paid an in-scope RCA).

Firms should prepare for multiple scenarios and implement robust filters to prevent double compensation and ensure consistency.

4. Prepare to design a process map that accommodates split complaints

Split complaints - where a customer raises issues both within and outside the scheme’s scope- require special handling. Firms should:

• define what constitutes a split complaint
• design a process map that clearly delineates how such cases will be handled
• ensure compliance with DISP (Dispute Resolution: Complaints) rules for regulated products, while developing DISP-adjacent processes for in-scope complaints.

5. Consider a strong project governance framework

Effective governance is essential. Firms should ensure they achieve this by implementing:

• A dedicated Project Management Office to oversee progress and risks.
• A project board for strategic oversight.
• A complex case committee for nuanced complaints or precedent-setting complaints.
• Legal and risk teams experienced in overseeing FCA redress schemes.

Firms should ensure that they have the right external support to design and assure the scheme, ensuring they can benefit from legal privilege and specialist capabilities.

6. A redress programme is not a change programme

A redress scheme is not a typical change programme and such an approach can risk overruns, overspending, and unnecessary complexity - contrary to the FCA’s principles of timeliness, simplicity, and cost-effectiveness. Firms must ensure external partners have proven experience in delivering large-scale remediation programmes.

Conclusion: Strategic readiness is key

The FCA aims to act swiftly following the Supreme Court’s decision. Firms that delay preparation risk falling behind. By focusing now on data integrity, process design, eligibility, complaint mapping, and governance, motor finance firms can not only comply but lead in the redress effort.

Readiness is no longer optional - it’s a strategic imperative.