Author: Russell J Kelsall

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FCA publishes motor finance consumer redress schemes

On 30 March 2026, at around 4:45pm, the UK Financial Conduct Authority (the FCA) published a press release, updated its webpage and published Policy Statement 26/3: Motor Finance Consumer Redress Scheme (PS26/3) (covering 584 pages).

But that was not all. The FCA also published (in addition to PS26/3):

– Technical Annex 1 (covering 181 pages);

– Technical Annex 2 (covering 45 pages);

– consumer research survey (covering 46 pages) and a technical report analysing the awareness of the relationship between vehicle dealerships and motor finance companies (covering 41 pages);

– an updated diagnostic report (covering 101 pages);

– motor finance redress scheme firm-led communications (covering 42 pages) and a supporting annex (covering 89 pages);

– two factsheets: one for customers invited to join the scheme and another for customers who have complained (each being 2 pages);

– analyst briefing slides (covering 25 slides); and

– a transcript of the analyst briefing call (covering 20 pages).

To try and avoid the need to read 1,178 pages, we’ve prepared a handy one-page summary of the key features of the consumer redress schemes (if you click the imagine you should get a bigger version). But the devil is, of course, always in the detail.

If you have any questions, please contact me, Jeanette, Leanna, or Paula, or any of your other usual Walker Morris contacts.

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FCA publishes press release on proposed motor finance consumer redress scheme

Earlier today, on 4 March 2026, the UK Financial Conduct Authority published a press release on its proposals to introduce a motor finance consumer redress scheme.

Some key messages are:

– The FCA says that “if we proceed with a scheme, we are likely to make several changes“.

– If a scheme is made, the FCA expects “to publish final rules in late March” and the timing “will be outside market hours and we’ll confirm the date in advance“.  

– The FCA has not yet made any final decisions on any scheme.

– But the FCA proposes to “streamline the consumer journey to make it smoother for firms to operate“. These changes will include:

(a) removing the need to ask customers who have already complained if they want to opt out: instead consumers will be told within 3 months of the end of the implementation period if they’re owed compensation and how much.

(b) consumers receiving redress offers will be able to accept it straight-away; and

(c) firms will not need to communicate by recorded delivery: instead a range of channels will be acceptable to best meet a consumer’s needs while preventing fraud.

– The FCA is likely to introduce “an implementation period of 3 months, with up to 5 months for older agreements“.

– The FCA reminds consumers that there “is no need to use a claims management company (CMC) or law firm“.

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HM Treasury publishes consultation on proposed changes to the legislative regime for appointed representatives

Earlier today, on 12 February 2026, HM Treasury published a press release and a consultation paper on proposed changes to the legislative regime for appointed representatives.

This consultation follows the Government’s press release and policy statement, published on 11 August 2025, setting out its intention to “shore up confidence in the use of Appointed Representatives and to safeguard the future of the UK’s Appointed Representatives regime“.

The key proposals are:

– to require firms wishing to use appointed representatives to first obtain permission from the Financial Conduct Authority (which aims to ensure the principle is suitable to be authorised);

– to provide “appropriate consumer protection when things go wrong” by allowing a complainant to take a complaint to the Financial Ombudsman Service where the authorised firm is not responsible for the issue (for example, where an appointed representative acts outside of the scope of what the principal accepts responsibility for); and

– to bring appointed representatives within the scope of the Senior Managers and Certification Regime so that it is better aligned with the framework applying to authorised firms.

The consultation closes on 9 April 2026.

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FCA publishes mortgage rule review webpage

Earlier today, on 2 October 2025, the UK Financial Conduct Authority (the FCA) published a mortgage rule review webpage bringing together a summary of the FCA’s work on its mortgage rule review.

The webpage’s aim is to set out the FCA’s changes and communications and what they mean for firms.

So far, the FCA lists five important developments. These are:

– the flexibility in the FCA’s existing stress test rule in MCOB 11.6.18R (and more can be found by visiting another webpage published by the FCA);

– the FCA’s Discussion Paper on the future of the UK mortgage market (the FCA has published a webpage and the Discussion Paper; the consultation period ended on 19 September 2025);

– the changes made to MCOB to support greater choice in the mortgage market (for more, see our summary of the changes);

– the developments to the loan-to-income flow limits; and

– the FCA’s speech on mortgage reform to the Building Societies Association from May 2025.

It’s expected that this will continue to be updated in the coming weeks, months and years.

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Financial Conduct Authority publishes its consumer duty priorities for 2025 to 2026

On 30 September 2025, the UK Financial Conduct Authority (the FCA) published a webpage setting out its consumer duty focus areas for 2025 to 2026.

The FCA is clear that it is moving from the implementation phase, to the impact phase. So it’ll focus on four main areas:

(a) Embedding the duty and raising standards

No more just walking the way, you now need to show that you can talk the talk too. Be prepared to share board reports, complaints data and how you treat vulnerable customers, or customers who are struggling. We’re expecting more good and bad practice examples to help firms know what good looks like.

There are four ‘cross-cutting projects’:

– reviewing products and services outcome: How firms are designing products and services to meet customer needs, including those with characteristics of vulnerability.

– reviewing firms’ approaches to outcomes monitoring: Looking at how firms are responding to outcome monitoring requirements.

– reviewing firms’ customer journey design: Looking at the design and delivery of firms’ customer journeys to ensure customers’ needs are met, with a particular focus on how firms apply friction throughout the journey.

– reviewing the consumer understanding outcome: Looking at how firms’ communications are helping consumers make informed decisions.

(b) Looking at price and value

Fair value has always been a key agenda item for the FCA even before the introduction of the consumer duty. The FCA will be publishing findings on (a) unit-linked pensions and long-term savings and (b) pure protection insurance later this year (having recently published its market study into premium finance).

(c) Sector specific deep dives

The FCA has planned work to tackle “areas of existing concern in sectors where there may be harm, or the potential for harm“. These include:

– fair value in SME business current accounts: the FCA is looking at how small business banking firms’ current accounts are complying with the price and value, and consumer understanding outcomes. Expect feedback to firms by the end of 2025.

– consumer understanding in the credit card market: the FCA is looking at how consumers understand the terms and conditions of credit card products and if they get enough clear information to support decision making, particularly when looking to take out a promotional offer.

(d) Simplyfing the Handbook

The FCA is exploring how the duty can help with streamlining existing rules and guidance. Why? To achieve less complexity, more innovation and better outcomes. But with high level principles comes uncertainty: a challenging balance for many firms.

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FCA and House of Lords Financial Services Regulation Committee’s letters on a proposed motor finance redress scheme published

It’s always interesting to see the exchanges between the UK Financial Conduct Authority (the FCA) and the House of Lords Financial Services Regulation Committee (the Committee). They usually provide useful insights into the thinking of both the FCA and the Committee.

The letters which have been exchanged following the UK Supreme Court’s decision in Hopcraft & Hopcraft v Close Brothers Limited; Wrench v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance; Johnson v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance [2025] UKSC 33 are very interesting. Here are the links:

– FCA’s letter dated 4 August 2025; and

– Committee’s letter dated 8 August 2025.

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FCA publishes letter to claims management companies inviting them to review financial promotions relating to motor finance claims

On 4 August 2025, the UK Financial Conduct Authority (the FCA) published a copy of a letter dated 31 July 2025 that it sent to claims management companies (or CMCs) inviting them to review their financial promotions relating to motor finance claims.

This letter says that between 1 January 2024 and 30 June 2025, the FCA’s engagement with 14 CMCs result in 225 financial promotions being amended or withdrawn.

The FCA also identified a number of concerns including:

– exaggerated claim values;

– falsely implying that refunds have already been secured or are guaranteed;

– creating a false sense of urgency;

– indiscriminately suggesting the contact relates to knowledge of a consumer’s motor finance agreement; and

– signing up consumers without their consent.

CMCs have therefore been reminded to “avoid using clickbait-style promotions or language that suggests a guaranteed outcome before any investigation has taken place. Additionally, given the potential for a redress scheme to be introduced, firms should not use language that implies a false sense of urgency. Such messaging may place undue pressure on consumers and could be considered misleading under the FCA’s rules and the Consumer Duty“.

The FCA expects CMCs to ensure “that all financial promotions are clear, fair, and not misleading, and that they accurately reflect the nature and status of any potential claims”.

The FCA has asked firms to take the following action:

– review and revise financial promotions;

– avoid misleading outcome guarantees;

– remove false urgency; and

– monitor and update promotions regularly.

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FCA says it will consult on a proposed motor finance compensation scheme

Earlier today, on 3 August 2025, the UK Financial Conduct Authority published a press release and a statement setting out its plan to consult on a proposed motor finance compensation scheme.

The devil is always in the detail (particularly on a complicated topic like this) so we will need to wait to see what the FCA says (a consultation is likely to be published in October 2025 with a six week period for responses).

If a scheme is made then the FCA says it expects most compensation payments to be ‘no more than £950’ and for payments to be made ‘in 2026’.

But there are many points raised, and questions left unanswered, by the FCA’s announcement. And some parts of their announcement require a lot of work and buy in from Treasury.

The FCA has also published a transcript of a call with market analysts which took place at 5pm on 3 August 2025.