The Financial Conduct Authority (FCA) has issued an update on its work following August's high-profile motor finance judgement delivered by the Supreme Court. Part of the update sees the deadline for consultation responses on a potential redress programme being extended until 12 December 2025.
On 7 October 2025, the FCA began consulting on an industry-wide compensation scheme designed to address liabilities for motor finance customers who were treated unfairly between 2007 and 2024.
Since the consultation launched, the FCA has been engaging with consumer groups, lenders, investors, motor manufacturers, trade bodies and professional representatives. The Authority has shared that feedback received so far has addressed several key issues, including:
- The methodology for calculating redress
- The time period covered by the scheme
- The rate of compensatory interest
- The role of independent mechanisms such as the Financial Ombudsman Service
- Cost-effective participation for smaller firms or those with limited eligible agreements
- Fraud prevention measures
- The implications of commercial relationships between motor manufacturers and captive lenders.
The FCA is encouraging all stakeholders to provide evidence and alternative suggestions where they disagree with the proposed approach. All feedback will be reviewed before final decisions are made.
In response to stakeholder feedback that further time is needed to analyse market data and prepare for implementation, the FCA has extended the consultation deadline to 5pm on 12 December 2025. Ongoing engagement with stakeholders will continue both during and after the consultation period. The FCA now expects to publish final rules in February or March 2026.
The regulator is also considering responses to a separate part of the consultation that looked at the pause on certain motor finance complaints. The pause has been in place since January 2024 and the date for responses to that part of the consultation has now passed.
CP25/27: Motor finance consumer redress scheme | FCA.
Information for firms on motor finance complaints | FCA.
Also see the BVRLA’s Commission Disclosure resource hub.
To share your thoughts for the BVRLA’s response, email the team at [email protected].
