8:24 am, March 4, 2026
The final terms of the FCA’s motor finance redress scheme are expected to be published by the end of the month, with the regulator set to impose an ‘implementation period’ to help streamline the process.
That is according to the latest announcement from the watchdog which says that ‘several changes’ are likely to be made to the current proposals.
Car Dealer reported last month that carmakers’ internal finance providers are due to be exempt from the scheme, following ‘heavy lobbying’ from firms.
The FCA now says it is considering more than 1,000 responses to its initial proposals but insists that final decisions on the scheme have not yet been made.
However, the regulator did add that it is likely to introduce an implementation period of three months, rising to five months for older agreements, due to the ‘scale and complexity of the scheme’.
A spokesman for the body said: ‘We are considering over 1,000 responses to our proposals for a compensation scheme for motor finance customers who were treated unfairly.
‘If we proceed with a scheme, we are likely to make several changes. If we do go ahead, we expect to publish final rules in late March. The timing of publication will be outside market hours and we will confirm the date in advance.
‘Final decisions on the scheme have not yet been made. But to help firms prepare and ensure consumers get any money owed promptly, we are setting out some details now on how we intend to streamline the consumer journey and make it smoother for firms to operate.
‘Given the scale and complexity of the scheme and in response to feedback, we are likely to introduce an implementation period of three months, with up to five months for older agreements. Firms could choose to process claims under the scheme sooner.
‘We would also streamline the process for consumers and firms.’
Explaining on the new implementation process would work, the FCA said: ‘People who complain before the scheme starts would no longer be asked if they wish to opt out.
‘Instead, within three months of the end of the implementation period, their lender would tell them whether they are owed compensation, and how much.
‘Consumers receiving a redress offer would be able to accept it immediately, rather than waiting for a final determination.
Firms would not be required to write to customers via recorded delivery.
‘We would allow a range of channels that best meet consumers’ needs with appropriate safeguards to prevent fraud.
‘Even with an implementation period, streamlining the process means millions of people would receive compensation in 2026.
‘The likely changes to the scheme were supported by many consumer groups and firms that responded to our consultation.
‘As well as providing a better experience for consumers, the changes would help keep the cost of delivering the scheme proportionate, supporting a well-functioning market for the millions of people that rely on it. ’
