The UK Financial Conduct Authority (FCA) published a Dear CEO letter addressed to all firms involved in motor finance lending and broking since 2007, outlining its expectations ahead of the introduction of the proposed industry-wide redress scheme. Although the redress scheme is under consultation, firms are urged to act now to meet existing complaints and prepare for potential implementation of the redress scheme. The FCA warns that failure to prepare adequately may result in enforcement action. For existing leasing complaints, firms must be ready to deliver accurate and fair complaint outcomes from 5 December. For commission-related complaints subject to the proposed extension of 31 July 2026, firms should continue gathering evidence, investigating diligently and progressing complaints, including issues that potentially fall outside the scope of the scheme which relate to lending and broking.
The FCA also expects lenders to begin taking the following actions in preparation: (i) accurately identifying impacted customers; (ii) gathering appropriate information to assess cases; (iii) strengthening case-handling systems and controls where necessary, including the use of AI-technologies; (iv) maintaining adequate financial and non-financial resources; and (v) taking responsibility at the senior manager level for ensuring there is no undue delay in the resolution of complaints, including by ensuring there is appropriate oversight of the firm's approach to the potential scheme. Lenders and brokers are expected to engage proactively with the FCA and notify it promptly of any material developments affecting their ability to meet obligations, via a SUP 15 notification. The FCA reaffirms its commitment to securing fair outcomes and expects full cooperation from all parties throughout the process.
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