The finance sector is evaluating the operational implications of the Financial Conduct Authority’s decision to lift the pause on the handling of certain motor finance complaints on 31 May 2026, two months earlier than previously proposed.
The reaction follows a company press release issued by the Finance & Leasing Association (FLA). In the statement, FLA chief executive Shanika Amarasekara said the move was “difficult to understand”, noting that the change “has created uncertainty for our member firms” as they had been preparing plans and customer communications on the basis of the original July timeline. She added that the association is seeking “urgent clarity” from the regulator on the rationale for the accelerated date and its practical impact on firms adjusting processes at short notice.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The FCA said the revised timetable “enables us to finalise and begin implementing any compensation scheme” and reflected its view that complaints “cannot be paused indefinitely”. The regulator said firms should have “sufficient time” to respond to complaints, whether or not they fall within a forthcoming scheme, given that they should already have been progressing investigations. It reiterated that final scheme rules are expected in February or March 2026.
Industry advisers also noted the need for continued preparation. Richard Pinch, Senior Director of Risk at Broadstone, said the shift in timing indicates a regulatory expectation that firms maintain progress on existing cases. He noted that while details of the scheme are still awaited, there remains scope for firms to prepare so they can respond promptly once the framework is confirmed.
The FCA’s policy position includes the exclusion of leasing complaints from the extended pause, meaning firms must resume sending final responses for those cases from 5 December 2025. The regulator also confirmed that firms will be required to retain relevant records until April 2031.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
