Most dealer principals are reading PS26/3 as a problem for lenders. They should be reading it as a mirror held up to their own sales floor.
The FCA's March 2026 policy statement on motor finance consumer redress covers 12.1 million agreements entered between April 2007 and November 2024. The £7.5 billion redress bill sits primarily with the lenders. The conduct that created it happened at the dealership, on the sales call. Undisclosed commission arrangements, finance presentations that gave customers a false impression about which lenders were being considered: those are not abstract regulatory failures. They are specific conversations your salespeople had with specific customers.
The scheme in brief, and why dealers are not as insulated as they think
PS26/3 establishes two redress schemes. Scheme 1 covers agreements from April 2007 to March 2014. Scheme 2 covers April 2014 to November 2024, with implementation running to June 2026, after which lenders have three months to contact eligible customers.
Lenders administer the scheme and fund the redress. Dealers are not directly liable under PS26/3 itself. But the conduct being compensated, specifically the failure by brokers to disclose commission arrangements that could affect the finance rate on offer, is a breach of CONC 4.5.3R. That rule governs every finance conversation happening on your sales floor today.
PS26/3 makes the historic pattern visible and quantifiable. Every dealership now needs to ask whether their current sales conversations would survive the same scrutiny applied to agreements written in 2018.
What the Johnson ruling actually said about disclosure
In August 2025, the Supreme Court handed down its judgment in Johnson v FirstRand Bank Limited, the case that prompted the FCA to move toward an industry-wide redress scheme. The Court rejected the finding of fiduciary duty, which was a partial victory for lenders. It upheld the unfair relationship finding under Section 140A of the Consumer Credit Act 1974.
The specific facts that mattered in Mr Johnson's case: commission paid to the dealer was equivalent to 55% of the total charge for credit, and the documentation given to the customer created the impression he was being shown products from a panel of lenders when the arrangement was far more constrained. The Court found the relationship unfair on those facts. The size of the commission and the accuracy of what was communicated at the point of sale both counted.
The implication for how your salespeople present finance is direct. A customer who does not know your salesperson earns commission, cannot readily work out how much, and has been given a misleading impression of which lenders were considered has grounds for an unfair relationship claim under Section 140A regardless of what PS26/3 says about historic agreements.
The gap between your compliance manual and your Saturday afternoon sales floor
PS26/3 is backward-looking. Consumer Duty came into force for open products in July 2023 and for closed products in July 2024. Your current sales process is governed by both.
CONC 4.5.3R requires brokers, which includes dealership salespeople arranging finance, to disclose the existence and nature of any commission arrangement where it could affect their impartiality or materially influence the customer's decision. The disclosure must be prominent and made in good time before the customer signs anything. Under PRIN 2A, you must be able to evidence good outcomes, not merely assert them.
A finance manager at a group running 12 rooftops told me recently that his branch managers still believe a generic pre-contract information document covers their disclosure obligations. The FCA's position, reinforced by Johnson, is that a form handed over at the point of signing is not timely, prominent disclosure made in the context of the actual sales conversation.
What a compliant finance disclosure looks like on a call
The FCA's guidance on communicating with motor finance customers about commission is clear that disclosure must be in plain language and help the customer understand the arrangement before they make any decision. For tied arrangements, where the dealer refers primarily to one lender, the customer must understand that at the outset. This is exactly the kind of gap that FCA compliance monitoring for dealerships is designed to catch on every recorded call.
On a phone call or in a showroom, the salesperson must state that the dealership earns commission on the finance being arranged, that the amount depends on the rate and product selected, and that the customer can ask for the specific figure. None of that is technically complex. Very few dealerships have a consistent script that reliably delivers it on every deal.
The compliance gap is not at the top of the business. Dealer principals generally understand the rules. The gap is between what the compliance manual says and what happens when a salesperson is closing a deal on a busy Saturday afternoon.
Commission disclosure: what your sales calls must include
| Element | Requirement | Where most dealers fail |
|---|---|---|
| Commission exists | Must be stated verbally, not just in documents | Omitted entirely or assumed the paperwork covers it |
| Nature of arrangement | Fixed, variable, or tied to specific lender | Described vaguely as “admin” or skipped |
| Amount on request | Customer must be told they can ask | Salespeople unaware this obligation exists |
| Timing | Before the agreement is presented for signing | Disclosed at signing, not during the conversation |
| Plain language | No legal or technical terms (Consumer Duty) | Copied from pre-contract documentation |
| Record of disclosure | Required to evidence good outcomes under PRIN 2A | No record kept of what was said on the call |
Why PS26/3's attestation requirement should change how you oversee calls
PS26/3 requires senior managers at lenders to personally attest to the oversight and delivery of the redress scheme. That obligation sits at lender level, not dealer level. The direction of travel is clear.
SYSC 10A requires firms to record and retain telephone conversations involving regulated activity for a minimum of six months. If your dealership is not recording sales calls, you have no evidential basis to support any claim about what your salespeople say to customers. Under the Senior Managers and Certification Regime, ignorance of what happens on the sales floor is not a defence when a complaint escalates.
The question to ask your compliance officer is not whether your policies are documented. Ask whether anyone has listened to a finance call this month and confirmed that CONC 4.5.3R disclosure was made verbally, in the right order, in plain language.
What dealer principals should do this week
- Pull and listen to a sample of this month's finance call recordings. Not transcripts: the actual calls. You are listening for whether commission disclosure was made verbally, before the finance agreement was presented, in plain language. If you are not recording calls, that absence is itself a SYSC 10A compliance failure.
- Brief your finance managers on what a compliant disclosure statement sounds like in practice. Generic FCA e-learning will not do. Your team needs a specific, tested script, reviewed by your compliance officer, and updated whenever your lender panel changes.
- Audit the timing of your pre-contract disclosure. If customers receive commission disclosure documentation at the point of signing rather than at the start of the finance conversation, your process does not meet the standard required by CONC 4.5.3R and reinforced by Johnson.
- Establish a monthly call monitoring log with documented outcomes. Under PRIN 2A and Consumer Duty, evidencing good outcomes is not a paperwork exercise; it is a governance requirement. A senior manager who cannot produce records of calls reviewed and found compliant has no position when the FCA asks questions.
- Prepare a briefing for your sales team on customer enquiries about PS26/3. Customers will start calling about the redress scheme. Your staff need a clear, accurate script that directs enquiries to the relevant lender and does not inadvertently create new liability through poorly chosen words.
Tools like axleo are built specifically for UK dealerships to automatically flag missing commission disclosures and Consumer Duty gaps across recorded sales calls. Whether you use software or a manual review process, the obligation to evidence good outcomes sits with you as dealer principal. See how axleo automates compliance across your dealership.
The compliance burden in PS26/3 is retrospective. The conduct risk running through your current sales process is not.