We are lifting the pause on the
handling of motor finance complaints on 31 May 2026. This
timeframe enables us to finalise and begin implementing any
compensation scheme, while giving firms a reasonable period to
prepare.
We paused the handling of some motor finance complaints in
January 2024. This was to prevent disorderly, inconsistent and
inefficient outcomes for consumers and knock-on effects on firms
and the market while we assessed whether there had been adequate
disclosure of commissions between motor finance lenders and
brokers.
We now have legal clarity from the Supreme Court and High Court
to proceed with setting out how firms should deal with very large
numbers of complaints and are consulting on a
compensation scheme for customers who were treated unfairly.
It is important that complaints are now dealt with promptly, not
least as some consumers have been waiting almost 2 years for an
answer. We are clear that complaints cannot be paused
indefinitely.
It is likely that we will go ahead with a scheme and complaints
that fall within it will be dealt with under specific rules,
which will include timeframes for them to be dealt with. We are
consulting on these timeframes now and are receiving much useful
feedback on what is needed to ensure a scheme runs smoothly.
We are consulting on a scheme with a broad scope, so the number
of complaints falling out of the currently proposed scheme should
be relatively low. Those who have submitted such complaints
should not have to wait longer than necessary.
We have decided, therefore, to lift the pause on the handling of
certain motor finance complaints on 31 May 2026. Ending the pause
on 31 May 2026, rather than 31 July 2026 as originally consulted
on, reflects our commitment to ensuring consumers receive fair
and timely outcomes.
It gives firms sufficient time to be ready to respond to
complaints, whether inside or outside of a scheme, given they
should already have been investigating them. It also takes
account of the fact that firms will, in most cases, have up to 8
weeks after 31 May 2026 to send a response to complaints outside
the scheme with the exact amount of time depending on when they
received the complaint.
In a letter sent today, we
have reminded firms again that they should be progressing
complaints. This is to ensure firms are ready to start issuing
final responses to complaints if they are not covered by any
scheme.
We have said we will publish final scheme rules in February or
March 2026. If we go ahead with a scheme, we will consider how
the rules interact with the end of the complaint handling pause,
to avoid firms having to send final responses that would
otherwise be dealt with in the scheme. In our final rules, we
intend to set out how firms should respond to complaints
involving both scheme and non-scheme elements, recognising that
it may be simpler and less confusing for consumers if firms send
a final response to any scheme and non-scheme complaints at the
same time.
Leasing complaints
As we proposed in our consultation, leasing complaints are
excluded from this further extension as they are not in scope of
the proposed compensation scheme. Firms need to start sending
final responses to any motor leasing complaint from 5 December
2025 in line with normal complaint handling rules.
Record retention
Firms will also have to retain and preserve relevant records
until 11 April 2031, supporting transparency and ongoing consumer
protection in line with the proposed scheme.
Advice for consumers
People who have already complained don't need to do anything.
However, consumers worried that they were not told about
commission and who think they may have paid too much for their
motor finance, should complain now.
