The Financial Conduct Authority (FCA) has extended its consultation on a proposed motor finance redress scheme until 5pm on 12 December 2025, citing feedback from lenders and industry representatives regarding the time required to analyse market-wide data and prepare for implementation.
The consultation, launched on 7 October, follows the Supreme Court ruling in August 2025 which, alongside a prior High Court judgment, confirmed that motor finance lenders hold liabilities to customers affected by discretionary commission arrangements between 2007 and 2024. The FCA described the proposed scheme as “the most efficient way to address the liabilities” and said it aims to “provide certainty for all affected.”
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In its update, the regulator acknowledged that stakeholders, including lenders, consumer groups, motor manufacturers, and trade bodies, have raised concerns about the scheme’s scope and operational complexity. These include the methodology for calculating redress, the compensatory interest rate, fraud prevention, and the implications for smaller firms and captive lenders.
The FCA noted that while some consultation questions may be answered more quickly, “analysis of the extensive market-wide data will take time,” and that it is important for lenders to “maintain the pace” to ensure the sector can move forward with clarity.
CP25/27: Motor finance consumer redress scheme
Shanika Amarasekara, Chief Executive of the Finance & Leasing Association, welcomed the extension, calling it “a step in the right direction.” She added that while nine weeks remains a short window for such a “complex and consequential proposal,” it is “an improvement on the original six.”
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By GlobalDataBroadstone’s Senior Risk Director, Richard Pinch, said the scheme “will likely have a much greater impact than the sector expected,” and noted that the FCA “appears to have listened to lenders’ calls for more time.” He described the data analysis process as “challenging,” and suggested that firms may seek “significant changes” to the final rules, now expected in February or March 2026.
The FCA confirmed it will continue engaging with stakeholders throughout and beyond the consultation period. It also reiterated that paused complaints cannot remain unresolved indefinitely, emphasising the need to bring certainty to customers, lenders, and investors.
