Motor Finance Commission Complaints Compensation Scheme – Information for our Customers
What has happened?
The Financial Conduct Authority (FCA) has launched a compensation scheme for car finance customers who were treated unfairly by lenders.
If you used finance to buy a car, motorbike, motorhomes or van, between 6 April 2007 and 1 November 2024 you could be eligible if you weren’t told about certain arrangements between the lender and the broker (usually the car dealer), either:
- The dealer or broker set the interest rate to earn more commission (using a discretionary commission arrangement).
- The commission was high – at least 39% of the total cost of credit and 10% of the loan.
- The dealer or broker was using one lender in most cases, a so-called tied arrangement, except where lenders can evidence that there were visible links with a manufacturer and franchised dealer. For example, where they shared a common or similar name.
Exceptions
There are some exceptions. Your agreement will be considered fair, if:
- The commission was £120 or less for agreements taken out before 1 April 2014.
- The commission was £150 or less for agreements taken out from 1 April 2014.
- You weren’t charged any interest.
What happens next?
There will be a set-up period so firms can prepare and hit the deadlines set:
- If you took out your loan before 1 April 2014, lenders must start assessing claims from 31 August 2026.
- If you took out your loan from 1 April 2014, lenders must start assessing claims from 30 June 2026.
- Some lenders may start looking at claims before these dates. Under the scheme, your lender should contact you if you’re owed money. But people who have already complained or complain before the end of the relevant implementation period will be compensated sooner.
- You don’t need to use a claims management company or law firm to make a claim, and if you do so you could lose more than 30% of the money you’re owed. You can submit your own complaint, for free, using a template letter on the FCA’s website, fca.org.uk/carfinanceclaims.
- If you don’t hear from your lender, you can still make a claim yourself — but you must do so by 31 August 2027.
- The FCA will closely monitor how firms follow the scheme’s rules and will step in if they fall short. If you disagree with your lender’s decision, the Financial Ombudsman can review whether the scheme rules have been applied correctly.
Legal Challenge to the FCA’s Motor Finance Redress Scheme
On 1 May 2026, a legal challenge was issued against the FCA’s motor finance redress scheme. You can read a statement from the FCA here.
The FCA published a further statement on 8 May 2026 setting out their expectations following the challenge and their advice for customers. You can read this statement here.
Frequently Asked Questions
The FCA have announced that the redress scheme will consist of two schemes.
Scheme One covers motor finance agreements which were taken out between 6 April 2007 and 31 March 2014.
Scheme Two covers motor finance agreements which were taken out between 1 April 2014 and 1 November 2024.
As Borderway Finance Limited began trading on 1 April 2014, only agreements which are covered by scheme two are included.
The type of agreements included within the redress scheme are:
1. Hire Purchase, Lease Purchase or Personal Contract Purchase agreements.
2. A Discretionary Commission Arrangement (DCA).
3. A High Commission Arrangement.
4. Agreements where there were contractual ties between the motor finance lender and vehicle manufacturer or dealer, where the lender was provided with a ‘first refusal’ for all motor finance agreements introduced by the manufacturer or dealer.
Your agreement will be considered fair if:
1. The commission was £120 or less for agreements taken out before 1 April 2014 and £150 or less from that date.
Or
2. You weren’t charged any interest.
The regulator has announced that the following vehicles are covered by the redress scheme.
1. Cars
2. Vans
3. Motorbikes
4. Motorhomes
Assets which are not included in the scheme include touring caravans, quad bikes and trailers.
The FCA have announced that firms, such as Borderway Finance, will have a short implementation period so we can prepare to launch the scheme. For any agreement which was taken out from 1 April 2014, this period will end on 30 June 2026.
The FCA have provided a timeline detailing key dates, which can be downloaded here.
The FCA’s compensation scheme is free to use and there is no need to use a claims management company or law firm, and if you do so you could lose more than 30% of the money you’re owed. You can submit a claim, for free, using a form on our website.
DCA’s were commonplace until the FCA banned them in 2021. A DCA allowed a broker, such as a car dealer, a limited amount of discretion over the interest rate charged to customers to alter the rate of commission they earned for introducing a customer to a finance company.
If your agreement with Borderway Finance was introduced to us through a broker, such as a motor dealer, between 1 April 2014 and 28 January 2021, it may have had a DCA agreement, however, not all agreements will be affected.
If you have already complained to us directly by using the forms on our website, or by using a template you have completed online, you will have already received correspondence from ourselves.
This will be either our Final Response, or a Complaint Acknowledgement letter.
Complaint Acknowledgement
If you have received a Complaint Acknowledgement letter, your agreement may be included within the FCA’s redress scheme. If this is the case, you will receive a letter from us between 1 July 2026 and 30 September 2026 detailing the next steps.
You do not need to complain or contact us again.
However, as the FCA have now defined the criteria for cases which are included in the redress scheme, it may be that you received a complaint acknowledgement letter, but your agreement is now considered fair, for example if the commission paid by ourselves to the introducer was £150.00 or less. If this is the case, you will receive a final response from us to confirm.
If you have complained to us through a Complaints Management Company or Law Firm, we will respond directly to them.
Final Response
If you have received our Final Response, then your Borderway Finance agreement will not be included within the FCA’s redress scheme. This will be because your agreement did not meet the criteria of the scheme, for example there was no DCA between Borderway Finance and the introducer.
If you have not already complained to us, either directly or through a Complaints Management Company or Law Firm, you can complain to us before the FCA’s redress scheme starts on the 1 July 2026. We have a form on our website which you can complete here.
If your agreement meets the criteria for the FCA’s redress scheme and you don’t complain to us, you will still be included within the redress scheme. We will write to you between 1 July 2026 and 31 December 2026 to ask you to opt into the scheme.
Yes - If you complain to us before the implementation period ends on the 30 June 2026 and your agreement is eligible for the FCA’s redress scheme, you will receive your compensation sooner.
If your agreement is included, we will write to you by 30 September 2026. You can accept or challenge the offer within 1 month, by 31 October 2026. If you accept the offer, we will then have 1 month to pay your compensation, by 30 November 2026.
If you do not complain before the end of the implementation period, but your agreement is included in the FCAs redress scheme, we will write to you to invite you to opt into the scheme between 1 July 2026 and 31 December 2026.
You then have 6 months to opt into the scheme, up until the 30 June 2027.
If you opt into the scheme, we will then confirm if you are owed compensation, and how much by 30 September 2027.
You will then have 1 month to accept or challenge the offer by 31 October 2027.
If you accept the offer, we will pay your compensation within 1 month by 30 November 2027.
If you disagree with our decision you are able to refer this to the Financial Ombudsman Service. The Financial Ombudsman can review whether we have applied the scheme rules correctly. You can find more details about the Financial Ombudsman here.
If you have had a motor finance agreement with Borderway Finance between 1 April 2014 and 1 November 2024 and haven’t already complained to us and don’t receive anything from us by 31 December 2026, then your agreement will not be included within the redress scheme. This means it has not met any of the criteria stipulated by the FCA for cases to be included.
If you don’t hear anything and wish to make a claim yourself, you can do so by using the form on our website, but you must do so by 31 August 2027. The form can be found here.
No, you do not need to complain for each agreement. If you have had multiple agreements with Borderway Finance, we will write to you to confirm which of those are included within the scheme.
The FCA has said that the average payout will be £830 per agreement however the amount of compensation you may receive will vary depending on your agreement. If your agreement is included within the FCA’s redress scheme and you are due compensation, we will write to you to confirm how much you are owed.
The FCA have established a dedicated supervisory team to supervise firms, such as Borderway Finance, to ensure we are complying with the rules of the Redress scheme. This includes assessing whether any exclusions of agreements have been applied correctly. Our Senior Manager must attest to the responsibility for our firm’s oversight and delivery of the scheme to our customers.
The FCA has announced that they will intervene if firms do not comply and are able to use enforcement powers if necessary.
We are also required to provide the FCA with regular reporting so they can monitor our compliance with the scheme and the FCA will publish updates on the progress of the redress scheme.
We don’t know what the impact of the legal challenge will be on the timeframe of the motor finance redress scheme. If you have already submitted a complaint, you don’t need to do anything more and we will publish any updates on our website. If you haven’t already submitted a complaint but wish to, you can do so for free using the form on our website.
Under our usual complaints procedure, which can be found here , we are required to issue you with a Final Response within 8 weeks of receiving your complaint. However, the Financial Conduct Authority (FCA) issued a statement on the 3 December 2026, which can be found here. This placed a pause on lenders responding to all commission complaints until after the 31 May 2026. If your complaint is not covered by the Motor Finance Redress scheme, you will hear from us within 8 weeks from the 1 June 2026. If your complaint is covered by the Motor Finance Redress scheme, we will write to you by the 30 September 2026 however this date may change due to the legal challenge to the scheme.
Borderway Finance Limited began trading on the 1 April 2014 and are part of the Cumberland Building Society Group. Any agreements which started prior to this date will have been written through H&H Finance Limited, a separate legal company.
If you have complained to us and provided details of a loan which was relates to an agreement with H&H Finance Limited, we will have forwarded your complaint onto them. If you wish to contact them, you can call them on 01228 406200, email them at info@hhgroupplc.co.uk or write to them at H&H Finance, Borderway Mart, Rosehill, Carlisle, CA1 2RS.
Protecting yourself from scams and fraud
Due to the high profile nature of the Motor Finance Redress Scheme, it is possible that fraudsters and scammers may use it as an opportunity to target people in an attempt to defraud them or obtain sensitive personal information.
There are some practical steps that you can take to help protect yourself against such threats which include;
- Verify the source. If you receive an email, text message or a phone call, do not click on any links or follow any directions to a website unless you have verified it’s correct. The FCA have a Firm Checker on their website which you can use to check the details of a firm.
- Be careful what you click on. Fraudsters might use social media as a way to target people with fake or misleading adverts, so before you click a link or enter any personal details, make sure it’s genuine. Use the FCA Firm Checker on their website to check a firm is genuine.
- Check for errors. Fraudsters are becoming increasingly sophisticated but be sure to check any correspondence carefully for errors such as spelling mistakes or company logos which are incorrect.
- Stop and think. If something seems too good to be true or a situation feels wrong, take a moment to pause and investigate.
- Don’t be rushed. Fraudsters often create a false sense of urgency to make you panic and act without thinking. A genuine organisation would never rush you into making a decision.
- Read terms and conditions carefully. The FCA’s Motor Finance Redress Scheme is FREE for everyone but you can use a third party such as a Claim Management Company or Professional Representative to handle your claim. If you do, read their terms and conditions carefully so you’re aware of their charges or exit fees. It’s not uncommon for claims firms to take up to 36% of any redress due, in charges. Only one company can manage your complaint. If you do decide to use a third party, be sure which one you want to represent you.
- Protect your information. Never share your bank PIN, online passwords or personal details with anyone.
- Reporting fraud or a scam. If you suspect you have been the victim of fraud or a scam, contact Report Fraud as well as your bank or building society. You can also contact the FCA if you think you’ve been contacted by a fraudster or unauthorised firm, or if you have received unsolicited or spam calls, text messages or emails.