FCA brings forward motor finance complaints deadline

The Financial Conduct Authority (FCA) has announced that it will lift the pause on the handling of motor finance complaints on 31st May 2026, rather than 31st July 2026 as originally consulted on, to ensure consumers receive fair and timely outcomes.

The regulator says that this timeframe enables the regulator to finalise and begin implementing any compensation scheme, while giving firms a reasonable period to prepare.

n January 2024, the regulator paused the handling of some motor finance complaints to prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while it assessed whether there had been adequate disclosure of commissions between motor finance lenders and brokers.

The FCA says that it now has legal clarity from the Supreme Court and High Court to proceed with setting out how firms should deal with very large numbers of complaints and are consulting on a compensation scheme for customers who were treated unfairly.

Shanika Amarasekara, CEO of the FLA, said “Today’s announcement from the FCA about ending the pause on the handling of motor finance complaints on 31 May, two months earlier than the previously consulted on date of 31 July, is difficult to understand. This change has created uncertainty for our member firms that have been preparing their operational plans, customer communications, and resourcing on the basis of the original timeline.

“We are seeking urgent clarity from the FCA on the rationale for accelerating the date and on the practical implications for firms that now face significant pressures to adjust processes at short notice. In the policy statement the regulator said that 502 out of 519 consumers supported the July deadline.

“We want to ensure that the eventual redress programme will be workable in practice, capable of identifying and compensating those who have suffered loss and launched with a credible implementation period to ensure it works smoothly.”

Richard Pinch, Senior Director of Risk at Broadstone, said “The FCA has brought forward the date at which firms will be expected to begin dealing with motor finance complaints that fall outside of the regulator’s compensation scheme. It demonstrates a desire to support positive consumer outcomes by avoiding unnecessary delays and is a warning to firms that they should be actively progressing complaints. While we still await the final details of the redress scheme, it is clear that there is plenty firms can be doing to prepare so that they are in a good position once the industry has clarity to meet the regulator’s expectations.”