Turning motor finance compliance into an opportunity

What happened?

In the second excerpt from a recent webinar on the FCA’s motor finance redress scheme, Garry Evans and Mike Morris set out what firms need to do now to prepare effectively.

They focus on the case for early preparation, covering practical steps from portfolio assessment and governance through to operational design and building internal capability.

Why does it matter?

The FCA’s consultation is a call to action: preparation is no longer optional. Firms that move early reduce operational stress while demonstrating a proactive approach to regulatory compliance.

Waiting until the scheme launches tends to produce rushed processes, reactive decision-making and higher operational costs, whereas early preparation allows firms to plan, coordinate and deliver with precision.

Who is affected?

Motor finance lenders and brokers with historical commission arrangements in scope of the redress scheme, along with the compliance, operations, IT and customer service teams who need to work together on portfolio reviews.

Key risks

• Incomplete or unreliable historical customer records and agreement classifications.
• Governance gaps that leave accountability and decision-making unclear during a large-scale redress exercise.
• Over-reliance on automation for complex or exceptional cases that require human judgement.

Actions to take

1. Review customer records, agreement classifications and historical data for completeness and accuracy.
2. Establish clear governance, accountability and decision-making structures across compliance, operations, IT and customer service.
3. Design workflows that combine automation for high-volume calculations with human review for complex or exceptional cases.
4. Train staff and build quality assurance mechanisms ahead of the scheme’s launch.

Wider implications

Firms that prioritise preparedness are positioned not only to comply with FCA expectations but also to reinforce their reputation as capable, customer-focused organisations once the redress scheme takes effect.

Recommendations

TCC’s motor finance redress workflow, powered by iQcodex, has already processed over one million cases, helping firms analyse datasets, prepare documents for review and define scope, tracing and contact strategies.

A half-day redress strategy workshop is also available, covering regulatory approach validation, sales documentation review, calculation testing and resourcing options.