Overview
- The regulator confirmed firms must resume handling certain motor finance complaints on 31 May 2026, two months earlier than previously proposed.
- The FCA closed its consultation on 12 December and says final rules are due early in 2026.
- Proposals include a 35% discretionary commission threshold, an average payout of about £700 per agreement, and eligibility estimated at roughly 14.2 million deals.
- Banks have pushed back on scope and cost and have increased provisions, including Lloyds to £2bn, Close Brothers to £300m, and Barclays to £325m.
- Consumer advocates criticize the plan as too narrow and complex and question the proposed 2.09% compensatory interest rate compared with higher rates seen in court, warning of potential further litigation.