12:30 pm, November 5, 2025
The Financial Conduct Authority (FCA) has extended the deadline on its consultation for a motor finance compensation scheme to December 12.
The watchdog said this morning (Nov 5) that it has ‘moved at pace’ since the Supreme Court judgement in August 2025, which, along with the landmark High Court judgement, ruled motor finance lenders have obligations to customers.
Last month, the FCA announced details of compensation scheme for customers, confirming around 14m car buyers will payouts of around £700 if it goes ahead.
But only this week the proposed redress scheme was slammed in a new report from the All-Party Parliamentary Group, which said the scheme was ‘not fit for purpose’ and could ‘short change’ millions of motorists.
The regulator has now said it has decided to extend the timetable after hearing from lenders, consumer bodies, and dealer groups that more time was needed to properly assess market data and ensure a smooth rollout of the scheme.
The original implementation date had been set for November 18, but now the deadline will be 5pm on December 12.
In the latest statement, the FCA said: ‘As well as feedback on the methodology for calculating redress, issues raised so far include the time period for the scheme; the rate of compensatory interest; how independent mechanisms will ensure confidence (including the role of the Financial Ombudsman Service and ideas for alternative approaches); how smaller firms or those with a low number of agreements eligible for redress can operate the scheme in a cost-effective way; how to prevent fraud; and what the relationship between motor manufacturers and their captive lenders means for commercial ties, particularly in relation to lending for the purchase of new cars.
‘It’s important we receive as much evidence as possible on specific concerns through the consultation as well as alternative suggestions if respondents don’t agree with our proposals. We’ll consider all the evidence and ideas received before taking final decisions.’
The FCA confirmed it expects to publish final riles in ‘either February or March’ 2026.
