The Financial Conduct Authority is lifting the pause on the handling of motor finance complaints on 31 May 2026.
This is earlier than the July 2026 deadline reflecting what it described as is commitment to ensuring consumers receive fair and timely outcomes.
It said the timeframe would allow it 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 said in a statement.
“It is important that complaints are now dealt with promptly, not least as some consumers have been waiting almost two 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.”
“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 on 3 December, it 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.”
