DCA redress: What motor finance firms should be doing now

The trajectory of the Discretionary Commission Arrangements (DCA) investigation is becoming increasingly difficult to ignore. A Supreme Court judgment is expected on 1st August, and the FCA’s policy statement PS24/11 has already laid out a potential path towards industry-wide redress. At the same time, complaint volumes are rising, putting pressure on firms to assess exposure, prepare their data and systems, and plan for what comes next.

Even without a formal redress scheme, the financial, reputational and operational risks are live. Firms that take steps now to understand their exposure and prepare for scale will be better placed to respond effectively under scrutiny.

This article outlines the regulatory signals firms should monitor, the practical challenges of large-scale remediation, and key lessons from previous redress programmes in the motor finance sector.

Regulatory signals: what to watch

The forthcoming Supreme Court ruling could influence how the FCA chooses to proceed. PS24/11 keeps a range of options open, but its structure highlights the volume of consumer detriment already identified and suggests a complaint-led model may not be sustainable.

The FCA has committed to updating the market within six weeks of the judgment. There is growing expectation that this may involve an “opt-out” redress scheme, where firms proactively identify and compensate affected customers.

Importantly, consumer awareness and media attention are already high. Public scrutiny is increasing, and delays or inconsistency in firm responses are likely to face challenge. Any planning done now should account for a more informed and vocal customer base.

Business impact of a redress scheme

If a redress scheme is introduced, firms will need to ensure their approach is technically robust, operationally scalable and capable of standing up to regulatory and public scrutiny. That means resolving challenges across data, fulfilment, treatment logic and governance.

One of the more complex areas will be customer segmentation. While many customers may fall into well-defined groups, others will require more tailored handling. This includes vulnerable customers, deceased or bankrupt account holders, and cases involving sold or transferred debt. For closed-book portfolios, firms may need to explore tracing solutions to make contact.

The fulfilment process itself must be supported by strong integration between redress calculation, customer communications, payment systems and audit functions. Fragmentation in this process increases the risk of errors, missed cases or inconsistent treatment.

Where data pressures will surface

Redress relies on data that is accurate, complete and connected to operational systems. The redress calculation and fulfilment process both depend on having a single, trusted source of truth. Firms must be ready to:

• Identify where key fields are held across legacy systems
  
  

• Address historical gaps or inconsistencies
  
  

• Establish assumptions where data is incomplete
  
  

Archived credit agreements, scanned documentation and decommissioned systems may all need to be reviewed. Assumptions should be consistent, well-evidenced, and approved through a formal governance process.

What firms should be doing now

Early planning is the foundation of an effective redress response. Before designing calculation models or tracing eligibility, firms should review the landscape they’re working within. This includes assessing where data sits, what is accessible, and what will need retrieval or reconstruction.

Firms should also establish a dedicated governance structure to manage assumptions, ensure consistency, and prepare for potential assurance or regulatory challenge. Redress decisions made under pressure must be fully auditable.

Importantly, redress is not just a modelling task. It is a delivery challenge. To execute effectively, firms need a closed-loop data process that connects logic with operational fulfilment, validation, and reporting. In previous programmes, this integration has often been the weak link, leading to duplicate payments, missed cases or audit breakdowns.

Lessons from past remediation programmes

Calculation is rarely the bottleneck. Where firms have faced pressure in the past is in delivering redress at scale, particularly across large, ageing customer books with complex records.

One common mistake is attempting to manage redress alongside business as usual. In practice, it requires a dedicated team with:

• Data specialists to validate and fill gaps
  
  

• Modellers to build defensible logic
  
  

• Operational leads who understand fulfilment and customer communications
  
  

• Oversight and audit support throughout
  
  

Firms also need to define how they interpret regulatory guidance and document how treatment rules are applied. Without a clear governance framework, ambiguity often becomes a blocker.

Planning today avoids disruption tomorrow

Even before the Supreme Court ruling is finalised, complaints are rising and consumer expectations are growing. The FCA has already signalled its direction of travel. Waiting for certainty before acting is unlikely to be a viable strategy.

Firms that have already assessed their exposure, reviewed their data readiness, and built in the right governance structures will be in a much stronger position to respond under pressure. Preparation now helps avoid disruption later, while ensuring fairness, consistency and defensibility throughout.