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June 3, 2026 
Daniel Lee Since 2024 I have been warning that GAP insurance has all the hallmarks of the next major mis-selling scandal. Not because of one bad sale, one careless dealership, or one isolated complaint, but because the evidence received points to a market-wide problem that has been allowed to sit in plain sight for years.
That message is now starting to reach the places it needs to reach.
I have now been contacted by a serving Member of Parliament who is interested in discussing my findings and reviewing the mounting evidence of widespread and systemic GAP insurance mis-selling. That is a significant development, because this issue can no longer be brushed aside as a niche complaint point or a bit of noise from professional representatives.
The files are there. The figures are there. The patterns are there. The only question now is whether those with the power to act are prepared to do so before this becomes yet another scandal they claim, years later, to have taken seriously all along.
Formal notice has already been served on the Financial Ombudsman Service, and evidence has also been provided to the Financial Conduct Authority. That evidence includes grotesque levels of commission, inadequate and/or missing suitability checks, serious fair value concerns and discretionary commission arrangements sitting within the product.
This overwhelming evidence goes to the heart of whether consumers were treated fairly, whether the product was properly assessed as suitable, and whether customers were being sold protection or simply being used as a revenue stream.
The FCA and FOS have therefore been placed at a crossroads. They can either deal with this properly, early, and head on, or they can sit back and allow history to repeat itself.
We have seen this before with PPI, with motor finance commission, and with other scandals where the warning signs were ignored until the evidence became impossible to deny. The regulators do not get to say, at some future point, that nobody raised the alarm. The alarm has been raised. The evidence has been provided. The pattern has been explained.
The uncomfortable truth for the industry is that GAP insurance has many of the same features we have seen in previous scandals. It was commonly sold as an add-on product at the point of vehicle purchase or finance, in the same environment where systemic mis-selling has already been proven.
The commission levels have reached extraordinary levels. The suitability checks, where they exist at all, are usually inadequate. Customers were rarely in a position to understand how the product was structured, how much of what they paid was being swallowed up before it ever reached the actual insurance element, or whether the product was genuinely suitable for their circumstances.
And now, as these claims begin to gather momentum, the market itself appears to be telling its own story.
We are seeing lenders pulling out of financing the product. We are seeing insurance providers removing GAP from their offerings. We are seeing firms suddenly distancing themselves from something they were keen to sell for years.
That does not usually happen when everything is fine. Businesses do not walk away from profitable products for no reason. They do not suddenly reassess their position because a few people have asked awkward questions. They do it because they can see the direction of travel.
More and more representatives are now using my consultancy services to monetise their existing motor commission books by identifying and pursuing GAP insurance claims. That, in itself, is going to accelerate the issue.
The evidence is no longer sitting in isolated files. It is being reviewed, organised, challenged, and escalated. Once representatives begin properly interrogating historic GAP sales in the same way motor finance commission arrangements have been interrogated, the scale of the problem is likely to become impossible for lenders, dealerships, insurers, FOS, and the FCA to ignore.
The industry has, of course, attempted to reach for the usual excuses. It will say the customer signed the paperwork. It will say the customer received the benefit of the cover. It will say the product may have been useful in a hypothetical scenario. It will say the sale was historic, the complaint is opportunistic, and the paperwork should be taken at face value.
We have heard it all before, and none of it answers the real questions and none stand up to scrutiny.
Was the product suitable?
Was the customer properly assessed?
Was the customer given enough information to make an informed decision?
Was the commission disclosed?
Was the value for money remotely defensible?
Was the sales process designed around the needs of the customer, or around the income generated for the firms involved?
Those are the questions that matter. Those are the questions the FCA and FOS must now face. Not in three years’ time, not after the press catches up, not after thousands of complaints are already stacked up, but now.
This is where accountability begins. The FCA has been told. The FOS has been told. Evidence has been provided. Concerns have been explained. A serving Member of Parliament has now shown interest in reviewing the findings.
The issue is no longer hidden, and those who have been placed on notice cannot later pretend they did not know.
If the FCA and FOS choose to take this seriously, they have an opportunity to show that lessons have finally been learned from previous scandals. They can force transparency, require proper disclosure, interrogate commission structures, and ensure complaints are assessed on the real evidence rather than on industry-friendly assumptions.
They can act early and demonstrate that consumer protection means something more than arriving late with a watered-down response once the damage is already done.
But if they choose the other path, if they sit back, delay, minimise, or allow the industry to mark its own homework yet again, then the people and organisations notified will be named publicly.
Consumers deserve to know who was warned, when they were warned, what evidence they were given, and what they chose to do with it.
GAP insurance is not some minor side issue. It is becoming PPI Mark Two.
Different product, same familiar smell: add-on insurance, excessive commissions, poor sales processes, weak oversight, customers left in the dark, and firms pretending there is nothing to see until the numbers become too big to hide.
The momentum is rapidly building. The representatives are taking an interest. The files are being reviewed. The complaints are being submitted. The evidence is moving before the regulator and Parliament.
The door has been knocked.
FCA, FOS, lenders, dealerships, and insurers should all understand what comes next.
This is the next scandal.
This is GAP insurance.
This is PPI Mark Two.
Let’s go.
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May 27, 2026 Daniel Lee There is something almost impressive about the motor finance industry’s ability to keep finding new ways to insult the intelligence of consumers.
After years of hidden commission arrangements, years of customers being kept in the dark, and years of lenders and dealerships quietly benefiting from a sales model that rewarded higher interest rates, we are now seeing recent posts and publications from those within the lender world suggesting that, without an FCA redress scheme, there is apparently some sort of “vacuum” around what should be considered unfair.
A vacuum.
Really?
The suggestion appears to be that lenders are now wandering around in the dark, scratching their heads, wondering how on earth they are supposed to identify unfairness unless the FCA kindly draws them a colour coded map. Even more remarkably, some have gone further and suggested that many discretionary commission arrangements may not actually be unfair at all.
That, frankly, tells you everything you need to know about the mindset that UK consumers are up againsts.
A discretionary commission arrangement was not some harmless technicality buried in the mechanics of motor finance. It was a carefully designed system that allowed the dealership to adjust the customer’s interest rate, with a higher rate producing more commission.
That is the bit that matters.
The customer was not being told that the person selling the finance could have a financial incentive to increase the rate. The customer was not being told what lower rate had been automatically accepted by the lender. The customer was not being asked whether they were happy for the rate to be increased so that the dealership could earn more money.
And that is the point lenders and their apologists seem desperate to dance around.
For a DCA not to be secret, the conversation would have needed to sound something like this:
“We have obtained finance for you at one rate, but we are proposing to increase it because that will generate more commission for us. The lender will receive more interest, the dealership will receive more money, and you will pay the bill. Are you happy with that?”
Of course, that conversation did not happen.
If it had happened, consumers would have asked the obvious question… why should I pay more so that the dealership can earn more?
The very idea is ludicrous, yet we now have people connected to the lending side seemingly trying to float the idea that many DCAs may not have been unfair. If that is genuinely how parts of the industry still view fairness, then the problem is even deeper than consumers already suspected.
For years, motor finance documents were littered with vague, carefully diluted wording. Consumers were often told that the dealership “may” receive commission, or “will” receive commission, as though that somehow gave the customer a meaningful understanding of what was actually happening.
It did not.
Telling someone that commission may exist is not the same as telling them that the finance rate may have been increased to generate that commission. It is not the same as telling them what the automatically accepted rate was. It is not the same as telling them how much commission was being paid. It is not the same as telling them that the person arranging the finance may have had a direct financial incentive to make the customer’s borrowing more expensive.
That is the difference the industry still seems determined not to confront.
A vague reference to commission buried in paperwork does not turn a hidden incentive into informed consent. It does not make the arrangement transparent. It does not mean the customer understood the conflict. It does not mean the customer agreed to pay more.
The industry can dress it up however it likes, but the central issue remains painfully simple… customers were not properly told how the arrangement worked, and they were not properly told how it affected the cost of their finance.
In short, DCA’s were fully secret, and deliberately kept that way.
The argument that there will be some sort of vacuum without an FCA redress scheme is not the clever point some in the industry appear to think it is.
If anything, it is an admission.
It suggests that, even after all of this, lenders still want someone else to tell them what fairness looks like. They want the regulator to create a controlled scheme, a neat framework, a manageable formula, and preferably a watered-down outcome that limits the damage and keeps the system standing.
However, they only want a controlled scheme if it is generous to lenders, and ensures they walk away in profit.
Fairness doesn’t come into the equation, and questioning what is fair only serves to prove that mis-selling is built into the culture.
If the customer was not told that the dealership could increase the rate to earn more commission, that is unfair.
If the customer was not told the lower rate that had been accepted, that is unfair.
If the customer was not told how much commission was being paid, that is unfair.
If the customer was not told that the person arranging the finance had a financial incentive that conflicted with the customer’s interest, that is unfair.
That is not a vacuum, it is common sense.
The only people pretending it is complicated are those with a commercial interest in making it complicated.
Perhaps the most laughable part of this latest round of commentary is the attempt to point the finger at representative fees.
This is quite something.
The same industry that operated hidden commission models, vague disclosures, conflicted incentives and self-serving sales structures now wants to lecture consumers about fees charged by representatives.
There is, however, one rather important difference.
Representative fees are set out in agreements signed by the customer. The customer is told what the fee is. The customer is told when it may be charged. The customer is provided with the terms before agreeing to proceed.
That is called disclosure.
That is called transparency.
That is called consent.
It is not a vague line saying “we may receive a fee” while failing to explain the mechanism, the amount, the conflict, or the impact on the customer. It is not a hidden arrangement operating behind the scenes while the consumer is presented with a finance offer they are led to believe is simply the cost of borrowing.
The attempt to compare disclosed representative fees with hidden discretionary commission arrangements is desperate. Worse than that, it is revealing, because it shows that some in the industry still do not appear to understand the difference between transparent charging and concealed financial incentives.
The irony in all of this is that lenders may want to be very careful what they wish for.
They may think attacking a redress scheme, questioning unfairness, and floating arguments that many DCAs were not unfair will help them limit the damage. They may think that undermining the need for redress will buy time, reduce liability, or create confusion.
But the truth is that many lenders should probably be praying for a scheme.
A scheme, even a heavily diluted one, at least offers structure. It offers containment. It offers a route to resolution that the industry can understand and administer. It gives lenders a framework within which they can attempt to draw a line under years of misconduct.
Without a scheme, the position will become far more dangerous for them.
If consumers are forced down individual complaint routes, litigation routes, ombudsman routes, and full disclosure routes, the industry may find itself facing a much wider exposure than it currently seems to appreciate. Complaint files will be requested. Commission arrangements will be scrutinised. Internal processes will be examined. Dealer agreements will be dragged into the open. Lenders will be asked what they knew, when they knew it, and why consumers were not told.
That is the world lenders may be walking into if they continue pretending that this is all too uncertain to deal with.
The motor finance industry does not need a redress scheme to understand the basic unfairness of a secret commission model. What it needs a scheme for is control.
Control of the process.
Control of the cost.
Control of the narrative.
Control of the damage.
That is why the “vacuum” argument should be seen for what it is. It is not a serious complaint about legal uncertainty. It is an industry struggling with the fact that the old model has been exposed, and the usual escape routes are becoming harder to use.
For years, customers were kept away from the truth. They were not told the accepted rate. They were not told the dealership could increase the rate. They were not told the amount of commission. They were not told the true nature of the conflict.
Now that consumers and representatives are forcing the issue, the same industry wants to complain that the path to redress is unclear.
How convenient.
The lenders now trying to minimise the issue should remember one thing… this scandal did not happen because consumers misunderstood motor finance; it happened because consumers were not given the information they needed to understand it.
That is the foundation of the problem.
Not confusion, not paperwork, not hindsight, concealment.
The industry can continue trying to suggest that not all DCAs were unfair, but that argument looks increasingly absurd when the whole model depended on customers not being properly told what was happening. If a customer was not told that the dealership could increase their interest rate to earn more money, then the customer was denied the chance to make an informed decision.
No amount of industry commentary changes that.
So yes, lenders may wish to keep attacking the idea of a redress scheme. They may wish to keep pretending that there is some mysterious vacuum around fairness. They may wish to keep pointing fingers at representatives, as though disclosed fees are somehow comparable with hidden commission models.
But they should be careful.
Because if there is no scheme, the industry will not get the neat, controlled, manageable outcome it appears to want. It will instead get thousands upon thousands of complaints, disclosure requests, legal challenges, and decisions that expose the true scale of what was done.
And at that point, the walls of this rotten, self-protecting industry will hopefully come crashing down.
...
May 21, 2026 Daniel Lee We have said for some time that GAP insurance has all the hallmarks of the next major financial mis-selling scandal, and the more complaint files we obtain, the harder it becomes for lenders, dealerships, regulators, or anyone else involved in this market to pretend otherwise.
Our latest investigation concerns a GAP complaint submitted to Suzuki Financial Services, which sits within the Black Horse group. Following the complaint, we submitted an additional Data Subject Access Request, and the complaint file that came back was, to put it mildly, revealing.
Within that disclosure was an email exchange that should concern anyone who has ever been sold GAP insurance through a motor dealership. Suzuki asked the dealership, Powerslide Motorcycles, to provide the IDD and the Statement of Demands and Needs, two documents that should sit at the very heart of any properly conducted insurance sale.
The dealership’s response was astonishing:
“Whats a IDD?”
That was not a throwaway line from a comedy sketch, although it would not look out of place in one. That was the response from a dealership involved in the sale of an insurance product when asked to provide one of the basic documents connected to insurance distribution.
The importance of this cannot be overstated. The Insurance Distribution Directive documentation and the Statement of Demands and Needs are not meaningless pieces of back-office admin that can be treated as an afterthought once a complaint lands, as much as the industry and the Financial Ombudsman Service may have you believe. They exist to protect customers by ensuring transparency, reducing the risk of mis-selling, and showing that the product being recommended actually meets the customer’s circumstances and requirements.
In plain English, these documents are essential to demonstrate that the customer was not simply sold an add-on insurance product because there was commission to be earned. They are required to show that somebody considered whether the customer needed the cover, whether it was suitable, whether it was properly explained, and whether the sale could be justified.
That is why the dealership’s response matters so much. If a dealership selling GAP insurance does not know what an IDD is, then the obvious question is what, exactly, was happening at the point of sale. What was being explained to the customer, what assessment was being carried out, and what understanding did the sales staff have of the regulatory obligations that applied to the product they were selling?
There is also a serious question for Suzuki Financial Services, because as the finance provider Suzuki should not have been asking around for this paperwork only after a complaint had been raised.
If Suzuki finances a GAP product within a motor finance agreement, it must satisfy itself before signing off the deal that the required documentation existed, that the sale had been properly conducted, and that the customer had not simply been pushed into an additional product as part of the wider finance arrangement.
A lender cannot take the commercial benefit of a transaction, finance the product, charge interest, allow the customer to pay for it, and then only begin looking for the customer protection documents when someone complains. That is not oversight, and it is not proper control of a regulated sales process; it looks very much like a retrospective scramble to find paperwork that should have been checked at the outset.
This is where the issue moves beyond the dealership and lands squarely at the door of the finance provider. If Suzuki does not have these documents before the deal was signed off, why not? If it did not check whether the documents existed, what exactly was its role in overseeing the sale of the insurance product it was financing?
This is not a one-off event either. This is standard procedure by lenders.
The phrase “Whats a IDD?” may only be a few words, but it speaks volumes about the culture that has surrounded GAP insurance for years.
It points to a market where the product was treated as a bolt-on, the paperwork as secondary, and the customer’s actual needs as something to be dealt with only if somebody later challenged the sale. It shows a culture where the priority was to get the GAP product added to the transaction, secure the sale, and worry about the evidence of suitability later.
This is exactly why we keep pursuing complaint files through DSARs. The final response letters issued by firms are often aggressive, defensive and predictable, usually filled with the usual language about processes, fairness, and no evidence of wrongdoing. The internal file, however, nearly always tells a very different story, because it shows what was actually being asked behind the scenes, what documents were missing, who was chasing what, and how firms reacted when the basic evidence of a compliant sale was requested.
In this case, the internal file appears to show Suzuki asking for key insurance sale documents after the event, and the dealership responding in a way that suggests it did not even recognise one of them. That is a serious huge red flag.
Powerslide Motorcycles may have provided the quote, but this cannot sensibly be dismissed as a one-dealership issue.
The concern is much wider than that. GAP insurance has been sold across the motor market for years, often alongside finance agreements, often with grotesque commission sitting somewhere in the chain, and often in circumstances where customers were unlikely to have any real understanding of how much of their money was going towards the actual insurance and how much was being swallowed up elsewhere.
We have already seen levels of commission up to nearly 90% of what the customer paid. We have seen inadequate and often missing suitability assessments. We have seen Demands and Needs documents that raise more questions than they answer. We have seen lenders and dealerships attempt to defend sales that, once the paperwork is obtained, begin to look increasingly indefensible.
Now we have a dealership, involved in the sale of GAP insurance, apparently asking what an IDD is.
If that does not ring alarm bells at the FCA and FOS, then it is difficult to know what will.
The FCA should be asking how many GAP policies were financed without lenders having checked the key insurance documentation. FOS should be asking firms to prove, properly and with evidence, that these products were suitable, fairly sold, and transparently explained.
Consumers should not be expected to accept vague assurances when the internal files suggest that the very documents designed to protect them were either missing, misunderstood, or treated as an afterthought.
This is not a technical complaint about a missing form. It is about whether the customer protection process was functioning at all. If the dealership did not understand the IDD, and the lender did not already hold the relevant documents before signing off the finance, then it is entirely fair to ask what protection the customer actually had.
The answer, on the face of it, is very little.
This latest disclosure does not merely raise questions about one complaint. It gives a glimpse into the sales culture behind GAP insurance.
The picture that emerges is of a market where the sale came first, the commission flows, and the compliance paperwork was something to be located, requested, explained away, or patched together later. That is precisely how mis-selling scandals develop under the nose of the regulator. The culture has been built in for decades, and when the PPI scandal broke the industry moved quickly to replace the lost revenue by replacing one insurance product with another. Goodbye PPI, hello GAP.
A lack of a strong regulator and strong deterrent only serves to fuel the systemic culture of greed.
Documentation is designed to protect consumers, and that is why “Whats a IDD?” matters. It cuts through the usual corporate language and exposes something far more troubling. It raises questions about the dealership’s approach to the products it sells, Suzuki’s oversight of the transaction, and the wider market’s treatment of GAP insurance as a convenient income stream rather than a regulated product requiring proper care, explanation and justification.
GAP insurance is not a side issue, and it is not a technicality. It is a market-wide problem that has been hiding in plain sight, and every complaint file we obtain seems to add another piece to the picture.
The question now is not whether firms can keep defending these sales with generic complaint responses. The question is how long regulators and ombudsmen can continue to look at evidence like this and pretend the system was working.
When a dealership selling GAP insurance responds to a request for an IDD with “Whats a IDD?”, the problem is not just the email.
The problem is the culture that allowed that email to exist in the first place.
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June 2, 2026 Daniel Lee The Financial Ombudsman Service investigator in a recent case has partially upheld a GAP insurance complaint against Johnson Cars (appointed representative of ITC Compliance).
However, the decision raises a serious and unavoidable question… how can FOS reach a fair and reasoned outcome when it admits that it does not have the key facts and figures needed to assess the complaint properly?
FOS accepts that ITC Compliance Limited has not confirmed how much chain commission was earned from the sale of the GAP insurance policy. FOS also accepts that, without knowing that figure, it cannot say for certain whether the commission affected whether the customer was treated fairly. It further accepts that it has not seen evidence showing whether the commission was proportionate to the broker’s costs.
Despite that, FOS has still moved to partially uphold the complaint.
It will come as no surprise that the standard of investigation has resulted in appeals from both sides.
The level of commission is not an optional extra in these complaints, it is front and centre.
This complaint concerns a GAP insurance policy sold through a distribution chain. In that context, commission is not just a background commercial arrangement. It determines whether the customer received fair value, whether the sale was distorted by financial incentives, and whether the customer was treated fairly.
FOS itself refers to the FCA’s previous comments that some GAP insurance arrangements involved commission of up to 70% of the value of insurance premiums being paid to parties in the distribution chain, including motor dealerships.
That makes the missing commission figure highly material.
When commission in the market reaches those levels (and higher), the commission has to be investigated properly. The amount paid, who received it, how it was split, and whether it was proportionate were all essential facts.
Yet FOS admits it does not have them.
FOS’s position is deeply troubling.
It has partially upheld the complaint as it has identified unfairness. It has recognised that the firm has not provided key evidence but it has still failed to disclose what meaningful steps it took to obtain the missing commission details.
What exactly did FOS ask ITC Compliance Limited to provide?
Did it request the full chain commission breakdown?
Did it request commission agreements, invoices, bordereaux, sales records or internal remuneration documents?
Did it request details for each party within the chain?
Did it ask the underwriter?
Did it ask the administrator?
Did it ask the distributor?
Where is the date of the commission request?
Where is the wording of the commission request?
Where is the follow-up?
Where is the escalation?
Where is the explanation of what was requested and what was not provided?
Where is the investigation trail?
Did it draw any adverse inference from the failure to provide the figures?
These are fundamental questions about the integrity of the investigation.
FOS cannot say it does not have the figures, rely on their absence, partially uphold the complaint, and then refuse to show what it did to obtain them.
The absence of that transparency is unacceptable, and suggests that the investigator simply wanted the complaint off his desk so that he could hit his closure target bonus.
Unfortunately for him, this complaint is far from being closed.
FOS says it is not persuaded that the policy did not represent fair value, a conclusion cannot safely be reached without the commission figures.
The cost of a GAP product to a customer is not just the risk price. It is a bundle of costs, risk pricing, profit, commission and distribution-chain payments. If a substantial proportion of the premium was paid away in commission, which it likely is, that would be directly relevant to fair value.
Without the figures, FOS cannot know whether the customer was buying meaningful insurance value or simply funding an inflated sales chain.
It cannot know whether the commission was proportionate.
It cannot know whether the customer was treated fairly.
It cannot know whether the product represented fair value in this individual sale.
FOS’ own decision exposes the contradiction… it refers to fair value, but admits that the financial data needed to test fairness and proportionality has not been obtained.
FOS has also failed to disclose whether it properly investigated the underwriter behind the GAP policy.
The underwriter could be central to the fair value assessment. If the underwriter later paused GAP sales, changed its arrangements, altered pricing, reviewed commission structures or was affected by regulatory intervention, that is relevant to this complaint.
But we have not been shown whether FOS obtained those details.
Again, the questions are simple.
Who was the underwriter?
Was the underwriter asked for evidence?
Was the underwriter asked about historic fair value concerns?
Was the underwriter asked whether GAP sales were paused or reviewed following FCA intervention?
Was the underwriter asked about the commission structure attached to this policy?
If FOS did ask, it must disclose the request.
If it did not ask, then the investigation was plainly incomplete.
FOS has left us with no choice.
A Data Subject Access Request has now been submitted.
A Freedom of Information request has also been submitted.
The purpose is straightforward, to obtain the information FOS has refused to provide voluntarily.
We are seeking the investigation trail, the correspondence, the internal notes, the requests for evidence, the responses received, the missing commission queries, the underwriter enquiries, the explanation of what FOS did, what it did not do, and why it reached a partial uphold despite admitting that key facts and figures were absent.
This could have been dealt with transparently.
FOS could have simply disclosed what it asked for and what it received.
It could have explained whether ITC Compliance Limited refused, failed or neglected to provide the chain commission details.
It could have confirmed whether any adverse inference was drawn.
It could have shown its working.
Instead, it refused to be transparent so we are now forcing disclosure through formal routes.
The issue now is bigger than the original GAP complaint.
It is about whether FOS is conducting proper investigations into GAP insurance complaints, or whether it is reaching outcomes while leaving the most important evidence untouched.
It is about whether firms can avoid scrutiny by failing to provide key financial information.
It is about whether consumers are expected to accept decisions based on incomplete evidence.
It is about whether FOS is prepared to hold businesses to account, or whether it is content to operate behind a wall of opacity.
We could have done this the easy way.
FOS could have provided the investigation record.
FOS could have disclosed the commission requests.
FOS could have confirmed what action it took when the figures were not provided.
FOS could have explained whether the dealership, broker, insurer, administrator and underwriter were all pursued for the missing evidence.
It did not.
So now we do it the hard way.
FOS has partially upheld the complaint based on facts and figures it admits it does not have.
That should concern every consumer that relies upon FOS.
An ombudsman service cannot claim to deliver fairness while failing to obtain the financial evidence needed to assess fairness.
It cannot rely on missing commission data while refusing to disclose how hard it tried to obtain it.
It cannot refer to fair value while lacking the very figures needed to test value.
And it cannot expect confidence while hiding the workings of its investigation.
In our view, this case exposes a serious failure of transparency, rigour and accountability.
The DSAR and FOI requests are now in motion.
The missing evidence will be pursued.
The investigation trail will be exposed.
And if FOS has failed to conduct a proper investigation, that failure will be brought into the open.
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May 1, 2026 Daniel Lee The FCA’s latest statement on the legal challenges to its motor finance redress scheme tells consumers everything they need to know.
Not because of what it says, but because of what it carefully avoids saying.
Only days ago, when a legal challenge was brought on behalf of consumers against its heavily watered-down motor finance redress scheme, the FCA reacted with one of the most disgraceful statements we have witnessed from a regulator.
It was “disappointing”.
The appellants “should consider releasing their customers from contract”, conveniently ignoring that these customers may want to be represented.
It would “delay consumers getting their money back”.
It would prolong uncertainty.
It was bad for investment and bad for the market.
Bad for everyone, apparently.
Everyone, that is, except the millions of consumers who would be short-changed by the very scheme the FCA is now so desperate to defend.
Fast-forward to the FCA’s latest statement, and suddenly the language has changed.
Now that three lenders have also issued legal challenges, Volkswagen Financial Services, Mercedes Benz Financial Services and Crédit Agricole Auto Finance, the FCA appears to have discovered diplomacy.
Now it “respects the right” of parties to challenge the scheme.
How very convenient.
When consumers challenge the scheme, the FCA throws a temper tantrum.
When lenders challenge the scheme, the FCA becomes measured, balanced and procedural.
And that, in our view, exposes the FCA’s real problem.
It is obsessed with two things… placating the banking sector and managing public opinion of itself.
Consumer protection appears to come a very distant third.
The FCA will not be too troubled by lender challenges in the court of public opinion.
Why?
Lender challenges allow the FCA to present itself as the tough regulator standing between banks and consumers.
It helps the façade.
It allows the FCA to say, “Look, the lenders think we have gone too far. We must be doing something right. We’re fighting for consumers”
But a challenge from those acting for consumers is very different.
That does not support the FCA’s carefully polished image.
It threatens it.
A consumer-side challenge risks exposing what this redress scheme really is.
It is damage control, a containment exercise that protects an industry that has unlawfully overcharged the UK public for decades while the FCA was asleep at the wheel… again
It is a way to draw a line under yet another scandal while leaving millions of consumers with less than they are truly owed.
Read the FCA’s latest statement carefully.
Where is the apology?
Where is the acknowledgement that this scandal did not appear overnight?
Where is the admission that concerns about motor finance commission were raised a decade ago?
Where is the thanks to the professional representatives who fought these issues while the regulator sat back?
Where is the recognition that the FCA did not take this fight to the Supreme Court on behalf of consumers?
Where is the humility?
It is nowhere to be seen.
Instead, the FCA talks about “rebuilding trust” and giving “certainty” to investors.
There it is again.
The market, the lenders, the investors.
The “healthy motor finance market”.
Consumers are mentioned, of course, but they are treated as part of the problem to be managed.
The FCA now says its scheme is fair to consumers and proportionate for firms.
This is a scheme that will likely see lenders walk away in profit.
This is a scheme that overlooks consumers who used high interest, sub-prime lenders, the majority of which won’t receive a penny.
So we ask, proportionate for whom?
For the consumers who were overcharged?
For the people who were never properly told how commissions worked?
For the millions who may not receive every penny they should receive?
Or proportionate for the firms that profited from arrangements the courts have found to be unlawful?
The FCA wants applause for designing a scheme that, in our view, protects lenders from the full consequences of their own conduct.
It wants to be thanked for tidying up a scandal it failed to stop, and arguably facilitated.
It wants to be trusted to deliver redress, despite having already shown that its instinct is to balance consumer justice against market comfort.
Trust in the FCA was lost long ago, and it is time for change.
Even in its latest statement, the FCA cannot resist warning consumers that they do not need law firms or claims management companies.
This is the same tired line.
The same attempt to persuade consumers that the very people who challenged wrongdoing, exposed misconduct, gathered evidence and forced progress are somehow unnecessary.
Let us be clear.
Consumers did not create this scandal.
Professional representatives did not create this scandal.
Lenders created it, and the FCA failed to stop it.
So for the FCA to continue wagging its finger at consumers about representation is astonishing.
It did not fight this battle for consumers from the start.
Others did.
Often at their own cost and risk, often while being dismissed, ignored or treated as an inconvenience.
Now the FCA wants consumers to trust the same system that failed them time and time again.
That takes some nerve.
The FCA knows exactly what is at stake.
A successful consumer challenge would not simply adjust a formula.
It would shine a very bright light on the FCA’s priorities.
It would invite the public to ask why the regulator’s scheme appears to leave consumers short.
It would raise serious questions about why the FCA has been so determined to make the process “efficient” for firms, “proportionate” for lenders, and “certain” for investors.
It would expose the uncomfortable truth.
The FCA is not frightened of delay.
It is frightened of scrutiny.
This scandal has gone on for far too long.
Consumers have waited, complained and been fobbed off.
Consumers have been told to trust lenders, then told to trust the regulator, then told they do not need help from representatives.
And now, when the watered-down scheme is challenged, the FCA’s first instinct is to blame those trying to secure a better outcome.
That tells us everything about the FCA.
The FCA’s latest statement may be more polished than its earlier tantrum, but the substance remains the same.
Protect the scheme.
Protect the market.
Protect the lenders from the full fallout.
Protect investor confidence.
And somewhere near the bottom of the list, talk about consumers.
The FCA can dress this up however it likes.
It can talk about speed, simplicity, proportionality and rebuilding trust.
Trust is not rebuilt by watering down redress.
Trust is not rebuilt by criticising those who challenge under-compensation.
Trust is not rebuilt by repeatedly warning consumers away from professional help.
Trust is not rebuilt by placing market certainty on the same moral footing as consumer justice.
The FCA had years to act.
It failed.
It still hasn’t issued one single fine against any lender, despite the unlawful actions that have ripped off UK consumers.
It has produced a scheme that, in our view, goes nowhere near far enough.
And now, when challenged, it appears more concerned with preserving its own position than confronting the scale of the scandal.
Consumers deserve full redress and accountability.
They deserve a regulator that is not constantly looking over its shoulder at the banking sector.
The FCA’s latest statement does not rebuild trust.
It confirms why so little trust remains.
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April 24, 2026 Daniel Lee The FCA’s response to the legal challenge against its motor finance redress scheme is as revealing as it is infuriating.
Its complaint appears to be that the challenge could delay compensation to consumers, but that point falls apart the moment you look at the timeline.
The unlawful conduct at the heart of this scandal was being raised directly with the FCA as far back as 2016.
It was not acted on then. It was not stopped then. It was allowed to continue.
So for the FCA to now act as though the problem is delay is beyond absurd.
The delay was created by the FCA’s own inaction.
Consumers have already waited years for justice.
They waited while lenders continued to profit and they have waited while complaints were unfairly rejected.
They waited while the regulator did what it does best when faced with serious wrongdoing by large financial firms… move slowly, say little, and avoid confrontation with the banking sector.
And here we are after years of doing far too little, the FCA has the nerve to point the finger at those challenging a scheme that is arguably designed to protect lenders from the full consequences of what they have done.
The FCA has shown its true colours time and time again.
There is another point the FCA would no doubt prefer people ignored.
It was not the FCA that took this fight to the Supreme Court on behalf of consumers.
It was not the FCA that put its own money, resources or reputation on the line to force this issue into the open.
It stood back and allowed others to take the risk.
Professional representatives fought these cases, pursued the arguments, invested the time, the money and the expertise.
They did so while the regulator was asleep at the wheel, yet again.
And now the FCA once again has the cheek to suggest that consumers do not need the help of professional representatives.
If consumers had relied solely on the regulator to protect them, these issues would still be buried.
The real issue here is not simply about what the FCA has said, but about what it has built.
This redress scheme is heavily watered down, and has all the hallmarks of a regulator trying to keep the industry comfortable while offering consumers just enough to make the problem go away.
A fair scheme would return all money consumers were wrongly charged.
It would reflect the seriousness of the misconduct, and fines would be handed to those involved.
It would not be designed in such a way that lenders can absorb the scandal, draw a line under it, and still come out of the process in profit from the unlawful commission arrangements.
The lenders were never going to be happy until they were protected.
The FCA knew that, and once again it appears to have bent over backwards to make sure they are.
This is the recurring problem with the FCA.
Time and again, when it comes to standing up to the banking sector, it goes soft.
It talks tough in headlines, then delivers something far more cautious behind the scenes.
It speaks of fairness and balance, but the balance always seems to land in favour of firms with deep pockets, expensive lawyers and powerful lobbying influence.
Meanwhile, ordinary consumers are expected to be grateful for whatever falls off the table.
It is nothing but damage control.
The FCA exists to protect consumers, not to design solutions that lenders can live with, but throughout this scandal it has looked far more concerned with market stability, lender exposure and political pressure than with making sure the public gets back every penny it is owed.
What seems to have really irritated the FCA is not the substance of the challenge, but the fact that someone has dared to challenge it at all.
That is what makes its response so telling, and borderline amusing.
It is abundantly clear that the FCA would not have reacted in the same way if lenders had brought the challenge.
There would have been no embarrassing public temper tantrum.
Instead, there would likely have been understanding, careful language, and ‘respect for the legal process’.
But when the challenge comes from the side of consumers, or from those trying to ensure consumers are not short-changed yet again, the FCA suddenly finds its voice.
That tells you everything.
This entire episode has stripped away any remaining pretence.
The FCA was warned but it failed to act while others fought the battle for justice.
The FCA then produced a heavily diluted scheme, and rather than accepting scrutiny, it has responded like a stomping toddler that has dropped their ice cream.
It does not like being challenged, nor being reminded how late it was.
It certainly does not like being confronted with the reality that its redress scheme leaves lenders in a far stronger position than consumers.
But that is where we are.
The FCA has shown its true colours throughout this scandal.
It was weak when firmness was needed, and cautious when courage was required.
It was far too willing to listen to lenders and government, and far too slow to act for the public it claims to protect.
That is why this challenge matters.
If this scheme does not deliver full and proper redress, it deserves to be challenged.
And if that makes the FCA uncomfortable, so be it.
The FCA cannot sleep through a scandal, water down the response, and then complain when someone objects.
Consumers have already paid the price for its failure.
They should not now be expected to accept less than they are owed simply to spare the regulator embarrassment or the lenders expense.
The real delay was created years ago.
The real scandal is the misconduct.
And the real outrage is that, even now, the regulator still seems more offended by the challenge than by the wrongdoing itself.
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