FCA: Complaint handling pause Policy Statement

Financial Conduct Authority

Pause on motor finance complaints handling to lift on 31 May 2026

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.