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, motorhome 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.
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 have announced that the likely hearing dates for the challenges to the scheme are either 14-18th of December 2026 or 16-26th February 2027 with a judgement expected in the following months.
Due to this, the FCA have announced a formal suspension to parts of the motor finance redress scheme though some elements of the scheme will go ahead.
The FCA have published further updates, which includes what this suspension means for firms and customers, following this challenge here.
What has been paused?
Although the FCA’s redress scheme is now active, as part of the suspension lenders are not required to calculate or pay redress amounts or write to customers whose agreement would be due redress as part of the scheme. This means if you have submitted a complaint to us and your agreement qualifies for redress as part of the scheme, we are not able to calculate how much redress you would be due, pay this to you or write to you to let you know how much it would be. We are also not required to write to customers to inform them about the pause, however we will ensure that our website and social media channels up to date with the most recent information.
What has not been paused?
Lenders are still required to write to customers whose complaints fall within the scheme but are not due any redress under the scheme rules. If you have complained to us before 30 June 2026 and you are not due any redress, we will write to you by 18 November 2026 to let you know.
If you complain to us from 1 July 2026 and your agreement does not meet the eligibility requirements for the redress scheme, we will write to you know within 5 months of receiving your complaint.
Submitting a new complaint after 1 July 2026
If you’ve not already complained to us and wish to submit a complaint, you can do so using the form on our website here.
If your agreement qualifies for the redress scheme, we will send you an acknowledgement letter to confirm this and that by complaining, you are opting into the FCA’s motor finance redress scheme. However, we are unable to tell you how much redress you are due or when you would be due it until we receive more information from the FCA. This will not be until after a judgement has been delivered following the hearing dates for the challenges to the scheme which are due to be held between either 14-18 December 2026 or 16-26 February 2027.
If your agreement is not eligible for the redress scheme, we will write to you within 5 months of receiving your complaint to confirm this.
Complaining using a Complaints Management Company
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. The FCA’s Motor Finance Redress Scheme is free for everyone but you can use a third party such as a Claims 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.
If you want to complain to us directly, you can use the complaint form on our website which can be found here. It’s simple, easy to use and will only take you a few minutes to complete.
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 announced that firms, such as Borderway Finance, had a short implementation period which lasted until the 30 June 2026 to prepare to launch the scheme. However, due to the legal challenge, which was announced by the FCA in May 2026, the FCA have suspended parts of the scheme. The FCA have stated that the likely hearing dates for the challenges to the scheme are either 14-18 December 2026 or 16-26 February 2027. We won’t know more until the outcome of the hearing is known but we will ensure our website and social media pages are kept up to date with the latest information.
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 before 1 July 2026 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. However, the FCA have suspended parts of the redress scheme due to the legal challenge which has been lodged against the scheme. This means we are not required to calculate how much redress you may be due, make any redress payments or write to you to confirm how much redress you may be due. The FCA have announced that the likely hearing dates for the challenges to the scheme are either 14-18 of December 2026 or 16-26 February 2027. Until the outcome of this hearing is known, we will not be required to write to you with updates, but we will ensure that our website and social media pages are updated with the latest information for our customers. You do not need to complain or contact us again.
However, it may be that you received a complaint acknowledgement letter, but no redress is payable under the scheme. If this is the case, you will receive a final response from us to confirm before 18 November 2026.
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, before the 1 July 2026 you can complain to us by using the form on our website which you can complete here.
If your agreement meets the criteria for the FCA’s redress scheme we will write to you to acknowledge your complaint and that you are opting into the redress scheme. However, we will not be able to calculate how much redress you would be due or pay this to you until we know the outcome of the hearing dates for the challenges to the scheme have been held on either 14-18 of December 2026 or 16-26 February 2027.
If your agreement does not qualify for redress under the scheme we will write to you within 5 months of receiving your complaint to confirm this.
If you complained to us before the implementation period on the 30 June 2026 and your agreement is eligible for redress under the FCA’s redress scheme, you will have received your compensation sooner. However, as the FCA have partially suspended parts of the redress scheme, including the requirement for us to calculate and pay redress, this is now no longer the case. We will not be able to calculate how much redress you would be due or pay this to you until we know the outcome of the hearing dates for the challenges to the scheme have been held on either 14-18 December 2026 or 16-26 February 2027.
If you did not complain before the end of the implementation period, you can still complain to us by using the form on our website which you can complete here.
If your agreement meets the criteria for the FCA’s redress scheme we will write to you to acknowledge your complaint and that you are opting into the redress scheme. However, we will not be able to calculate how much redress you would be due or pay this to you until we know the outcome of the hearing dates for the challenges to the scheme have been held on either 14-18 December 2026 or 16-26 February 2027.
If your agreement does not qualify for redress under redress scheme we will write to you within 5 months of receiving your complaint to confirm this.
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. However, due to the suspension of the redress scheme we are not required to write to customers until after the hearing dates for the challenges to the scheme have been held on either 14-18 December 2026 or 16-26 February 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.
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. However, due to the suspension of the redress scheme we are not required to write to such customers until after the hearing dates for the challenges to the scheme have been held on either 14-18 December 2026 or 16-26 February 2027.
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.
The FCA have announced that they are suspending parts of the redress scheme following the legal challenge to the scheme. The FCA have announced that the likely hearing dates for the challenges to the scheme are either 14-18 of December 2026 or 16-26 February 2027.
The FCA have said that a judgement would be expected in the months following the hearing into the redress scheme. If the scheme is upheld, and the judgement isn’t appealed, they would expect redress payments to begin in 2027. If the scheme is overturned in whole or part, the FCA will need to decide what to do next.
The FCA believe that a compensation scheme is the simplest route for consumers and the most efficient way for lenders to put things right. However, should they need to seek views on a revised scheme that could face legal challenge, compensation could be delayed until 2028 or beyond.
Whilst we are not required to write out to our customers whose agreements are included in the redress scheme, we will ensure that our website and social media pages are kept up to date with the latest information from the FCA.
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, or is not due any redress, you will hear from us by 18 November 2026. If your complaint is covered by the Motor Finance Redress scheme, due to the suspension of parts of the scheme by the FCA, we are not required to calculate and pay redress or to write to you until after we know the outcome of the hearing dates for the challenges to the scheme have been held on either 14-18 December 2026 or 16-26 February 2027.
Whilst we are not required to write out to our customers whose agreements are included in the redress scheme, we will ensure that our website and social media pages are kept up to date with the latest information from the FCA.
If you have complained to us and received an acknowledgement letter, you do not need to complain to us again.
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.