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.
Keeping Yourself Safe
- Watch out for scams. Some criminals are pretending to be lenders or the FCA offering fake compensation. Your lender or the FCA will not ask you to transfer money or for your bank PINs or passwords.
- Visit fca.org.uk/carfinanceclaims to get 100% of the facts.
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.