The UK's major car finance scandal has reached a critical juncture, with the Financial Conduct Authority (FCA) issuing a final deadline for firms to respond to customer complaints. This development marks a significant step in the long-running saga that could see millions of drivers receive compensation.
FCA Imposes Final Deadline for Complaint Responses
The financial regulator has written to motor finance firms, instructing them to resume handling specific complaints from Friday, 5 December 2025. In a key move, the FCA stated that firms must begin sending final responses to complaints about leasing agreements from that date, as these are excluded from any potential future redress scheme.
For all other complaints related to motor finance commission – both Discretionary Commission Arrangement (DCA) and non-DCA – the pause on complaint handling has been extended. Firms now have until 31 May 2026 to send their final responses, a shorter timeframe than initially proposed.
Pathway to Potential Payouts
This regulatory action paves the way for a potential mass compensation scheme. The FCA indicated this extended timeframe allows it to "finalise and begin implementing any compensation scheme, while giving firms a reasonable period to prepare".
The consultation on the proposed consumer redress scheme closes on 12 December 2025. A final decision on whether the scheme will proceed will be announced by the end of March 2026. If implemented, it could see millions of affected motorists receive payouts, with estimates suggesting an average of £700 per person.
What This Means for Consumers
The FCA has made clear its intention to prevent unnecessary delays for consumers. By bringing forward the complaint handling extension deadline from 31 July to 31 May 2026, it aims to ensure people "do not wait any longer than necessary for a complaint response" if no scheme goes ahead, or if a scheme has a limited scope.
Furthermore, the standard timeframe for consumers to escalate a complaint to the Financial Ombudsman Service will revert to the usual six months for any final responses sent after 29 January 2026. The regulator has ordered firms to immediately apply the new rules outlined in its policy statement.
This update represents a decisive moment for drivers caught up in the scandal, setting clear timelines for firms to address grievances and moving the process closer to a potential multi-million-pound compensation outcome.
