Redress Readiness: Are motor finance lenders prepared for the challenges ahead?

The impending motor finance redress scheme is already being compared to the Payment Protection Insurance (PPI) situation, representing a similar scenario that requires large-scale data and operational preparedness.

As a consumer it’s hard not to have heard of the motor finance situation; from making headline news through to consumer champions raising awareness, leading to over 23 million consumers believing they may be entitled to a payout1. This high level of engagement is a critical factor for lenders, particularly as the FCA estimates approximately 14 million motor finance agreements will qualify for the redress scheme, meaning a significant portion of the consumers currently believing they are entitled to a payout are likely to be ineligible.

The root of this challenge could lie with the consumer's difficulty in finding or recalling exact details for agreements taken out up to 18 years ago. How many of us can honestly say they still have the paperwork from a car they bought 15 years ago? Was it an in-scope Personal Contract Purchase (PCP) or an out-of-scope Personal Contract Hire (PCH)?

Ignoring the lessons of PPI, particularly around the overwhelming volume of enquiries and the resultant administrative cost could be a significant risk to a lender's financial and reputational health, especially with the likely addition of much greater onus on lenders to find affected customers.
 

The current redress reality: Challenges for lenders

The complexity of the scheme means the redress process is fraught with challenges. Lenders potentially face a daunting combination of data gaps, non-compliance risks, and fraud threats:
 

• Missing historical data: The proposed scheme is likely to cover agreements dating back as far as April 2007. This extensive look-back period presents an inherent challenge, as some lenders may find their records incomplete or simply no longer held for this duration. This poses a significant operational hurdle to achieving the necessary level of data certainty required for the currently proposed redress process.
   

• Outdated contact information: Lenders are likely to have a FCA requirement to proactively contact eligible customers. However, data suggests this could be a massive undertaking: up to 47% of consumers who took out motor finance in 2007 are no longer resident at the same address2, risking failed communications and non-compliance to the likely requirement on firms to “do what they can to track down consumers” 3.
   

• Acute threat of fraud: A scheme this large and complex is a magnet for fraud, an acute threat that must be actively mitigated to ensure payments end up in the hands of the correct individual and meet regulatory requirements.
  
   

How Equifax can help

We’ve created a bespoke range of Motor Finance Redress solutions designed to help lenders confidently manage key parts of the redress process - to efficiently manage data challenges, minimise operational costs and mitigate fraud risk.
Here’s how we can help you address three key problems lenders are likely to face:
 

1. Missing historical data; impacting the ability to assess eligibility, calculate redress, or contact impacted customers 
   We offer an extensive view of historic motor finance information, powered by data from over 35 million motor finance accounts. This depth of data is likely to be critical for addressing the proposed eligibility period.
    
2. A significant proportion of consumers are likely to have moved or changed their contact details since their agreement began, placing the onus on lenders to find and contact them.
   We can help you find out where your customers are living now, either by reaffirming the address you previously held, or providing a new address. As part of that assessment we provide as standard deceased insights, and the option of appending current email and telephone numbers to complement the communication channels specified by the redress scheme.
    
3. Making sure claimants are legitimate and payments go to the intended recipient
   We provide a flexible, multi-layered approach to verify a consumer’s identity, helping meet compliance needs, pay the right person quickly and accurately every time, and significantly reduce the inevitable threat of fraud.
   
    

Ready to get started?

At Equifax, we can help lenders secure their redress readiness ahead of the anticipated announcement from the FCA in early 2026. Download our Motor Finance Redress brochure to discover how we can help you eliminate your data gaps, manage fraud, reduce operational costs and deliver a positive consumer experience or contact me directly if you have any questions.
 

Sources:
1 Slater & Gordon poll Jun 2025.
2 Equifax 2025: Based on a sample of 80k motor finance accounts per origination year
3 FCA, Motor finance consumer redress consultation Paper CP25/27, Section 6.6