UK Motor Finance Scandal Takes a Major Step Forward: Complaints to Resume in May 2026
Reuters•
The UK's Financial Conduct Authority (FCA) has announced that it will resume handling motor finance complaints on May 31, 2026, marking a significant milestone in the ongoing effort to address the widespread mis-selling of motor finance products. This decision represents a two-month acceleration from the previously proposed deadline, reflecting the FCA's commitment to delivering a robust framework for compensating consumers affected by the scandal. The initial pause on complaint handling was implemented to enable the FCA to focus on establishing a comprehensive redress scheme, designed to address the issue of firms classifying customers' income when assessing their ability to repay loans, potentially leading to unaffordable credit agreements. Investigations have revealed that certain firms may have used discretionary commission schemes that incentivized brokers to prioritize commission over the customer's best interests. The FCA has been working closely with lenders and consumer groups to develop a comprehensive redress scheme, with details of the scheme, including eligibility criteria and the compensation process, expected to be released in the coming months. The accelerated resumption of complaint handling aims to ensure that consumers can still pursue individual claims even as the compensation scheme is being implemented. Affected consumers are encouraged to gather relevant documentation and prepare their complaints in advance of the May 2026 deadline. The FCA's decision marks a significant step in resolving the motor finance mis-selling scandal, which has impacted a substantial number of consumers across the UK.
