Finance
UK to lift pause on motor finance complaint handling in May 2026
Published by Global Banking & Finance Review®
Posted on December 3, 2025
1 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 3, 2025
1 min readLast updated: January 20, 2026
The FCA will resume handling motor finance complaints by May 2026, addressing a mis-selling scandal involving major lenders like Lloyds and Barclays.
Dec 3 (Reuters) - Britain's financial regulator will lift the pause on handling motor finance complaints on May 31, 2026, two months earlier than initially proposed, as it finalises a compensation scheme for those hit by the mis-selling scandal, it said on Wednesday.
The Financial Conduct Authority had paused processing complaints in January 2024 while it assessed whether motor finance lenders and brokers had adequately disclosed commissions.
The scandal, which dates back to 2007, involves lenders such as Lloyds, Close Brothers and Barclays, that are accused of using excessively high interest rates in car-finance arrangements and including extra bonus payments.
The companies did not immediately respond to a request for comment.
The regulator has estimated that the industry will have to pay about 11 billion pounds ($14.57 billion) in compensation and administrative fees.
($1 = 0.7549 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Sumana Nandy and Harikrishnan Nair)
The Financial Conduct Authority (FCA) is a regulatory body in the UK that oversees financial markets and firms to ensure consumer protection and maintain the integrity of the financial system.
Motor finance refers to the various financial products available to consumers for purchasing vehicles, including loans, leases, and hire purchase agreements.
Compensation in finance typically refers to payments made to consumers or investors to rectify losses incurred due to mis-selling or other financial misconduct.
Interest rates are the costs of borrowing money or the returns on savings, expressed as a percentage of the principal amount, influencing consumer spending and investment.
A financial complaint is a formal grievance raised by a consumer regarding a financial product or service, often related to issues like mis-selling or poor service.
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