Bite-size: Motor finance multiple representation - the FCA’s new burden for lenders

On 4 February 2026, the FCA issued a commission-related ‘Dear CEO’ letter addressing a growing complication in motor finance commission complaints: customers who have appointed multiple professional representatives (CMCs or law firms) for the same claim. As the final Consumer Redress Scheme rules are expected by the end of March and the current complaints pause is due to end in May 2026, the FCA is signalling that firms should address multiple representation now to avoid future backlogs. 

The FCA sets out a series of expectations for how firms should handle these cases. It states lenders should identify complaints where more than one professional representative appears to be acting, contact all such representatives and copy the customer into correspondence so that authority can be clarified. The FCA indicates that once the pause is lifted, complaints outside any scheme will need to be progressed ‘at pace’, and that it would not expect delays in complaint handling purely because there is uncertainty about who represents the customer. 

From a market perspective, this raises practical concerns. The issue itself is not lender-created - often stemming from aggressive CMC acquisition tactics or customers unknowingly signing multiple authorities, yet lenders are being placed in the position of facilitating resolution between competing commercial entities. The FCA’s expectations introduce new operational steps, additional correspondence workflows, data protection considerations and evidential complexity, all of which sit with lenders rather than the representatives who have created the conflict. 

There is significant scope for things to go wrong. Lenders face potential exposure to disputes between representatives regarding precedence, arguments over termination fees, and complaints about how the firm has managed the process of establishing authority. Although the FCA and SRA have issued a joint message to professional representatives setting out expectations around conduct and client interests, the practical administrative burden and much of the regulatory risk are effectively being transferred to firms responding to the complaints.  

Key takeaway:

Lenders should now design and document a clear process for identifying and managing multiple representation in motor finance complaints. While the FCA’s letter ‘suggests’ and ‘expects’ rather than explicitly mandates, the combination of supervisory scrutiny, the end of the complaints pause and the stated possibility of intervention means firms will need to be able to evidence that they have taken reasonable and proactive steps to manage these conflicts. This assumes the FCA continues with this approach, lenders are already starting to push back on what is seen as a burden they should not have to carry.