FCA’s proposed rules contain a structural flaw that systematically excludes the most vulnerable borrowers from compensation.
Bott and Co have identified a flaw in the FCA’s proposed motor finance redress scheme which could leave the most vulnerable car buyers without compensation, even when they paid undisclosed commission identical to other customers.
The FCA’s proposed motor finance redress scheme contains a flaw that systematically excludes the most vulnerable borrowers from compensation. Sub-prime consumers, those who already pay more for credit, are less likely to qualify for redress than prime borrowers, even when the undisclosed commission payment was identical.
Current FCA guidance requires that commission must exceed 35% of interest charged and 10% of the loan amount to be considered unfair. Our analysis shows this threshold disproportionately favours prime borrowers, leaving the most vulnerable effectively uncompensated.
This isn’t just a technicality: consumers could collectively miss out on millions of pounds in compensation because of a loophole in the FCA’s calculations.
Bott and Co Solicitor, Coby Benson, says: “It’s deeply unfair that people who have wrongfully paid very high commission without even realising it, yet miss out on compensation simply because it represents less than 35% of their interest.
Those already struggling with high borrowing costs are being penalised again by a technical rule they can’t control.
We addressed this in Bott and Co’s Consultation Response to the Financial Conduct Authority submitted In December 2025.
As solicitors, we remain duty-bound to act in our clients’ best interests, and beyond that, to fight for fairness for consumers who have been affected by these unfair practices.