Martin Davies, spokesperson for the Leasing Broker Federation, said: “This is a significant intervention in the motor finance market and it is right that where customers have suffered a clear financial loss, they are compensated.

“Brokers operate within a regulated framework and in many cases were not responsible for how commission structures were designed or disclosed. However, they will be on the frontline of customer conversations as this process unfolds.

“What is critical now is that the scheme is delivered in a way that is clear, proportionate and focused on genuine loss. If it becomes overly complex or too broadly applied, it risks creating confusion for customers and additional friction across the market.

“This also marks a reset point for the industry. The future of motor finance has to be built on transparency, consistency and a clear understanding of how products are structured, with brokers playing a central role in guiding customers through those decisions.”