Driving change: The Supreme Court ruling sparks industry debate

What happened?

In a webinar led by experts from TCC, Recordsure and Momenta, Garry Evans, Chief Product Officer and Chief Commercial Officer for TCC Group, was joined by Gary Maude, who heads TCC’s advisory function, and Mike Morris, Head of Operations at Momenta, to discuss the Supreme Court ruling on motor finance commission arrangements and the FCA’s subsequent proposed redress scheme.

The panel noted that the FCA’s proposed approach has sparked concern across the sector, with many fearing the bar for “unfairness” is set too low, potentially widening the scope of complaints and increasing liability. A narrower focus, such as limiting cases to discretionary commission arrangements or shortening the lookback period, might ease the burden while increasing the need for robust, case-by-case handling.

Why does it matter?

The FCA’s approach could trigger a wave of claims management company-led complaints, creating significant resourcing and reputational challenges for lenders on top of the operational task of large-scale remediation. Mike Morris has been preparing for the DCA remediation and redress programme for more than eighteen months, reflecting the scale of the task facing firms.

How firms act now, ahead of the FCA’s expected update in October, will shape their risk, resilience and regulatory relationships for years to come.

Who is affected?

Motor finance lenders and creditors are directly affected, particularly those with historical discretionary commission arrangements, along with their complaints handling, remediation and operations teams.

Key risks

• A wave of claims management company-led complaints if the FCA sets a low bar for “unfairness”.
• Resourcing large-scale remediation programmes without sufficient operational capacity or planning.
• Reputational damage from how firms are seen to handle complaints and remediation under scrutiny.
• Inconsistent case-by-case handling if a narrower scope, such as DCAs only, is adopted without robust processes.

Actions to take

1. Assess your firm’s exposure to the proposed redress scheme, including historical discretionary commission arrangements.
2. Prepare for multiple scenarios, given the FCA has not yet confirmed the final scope or lookback period.
3. Strengthen governance and customer engagement ahead of the FCA’s expected update in October.
4. Explore how technology, including AI, can help scale your complaint handling and remediation response.

Wider implications

The FCA’s final position on scope and the lookback period will materially affect the size and shape of remediation and redress programmes across the sector, with knock-on effects for operational teams and customers alike.

Recommendations

Firms should use the period before the FCA’s October update to strengthen governance, assess exposure across multiple possible scenarios, and consider how AI-enabled complaint handling can support a consistent, case-by-case response at scale.