UK FCA policy statement on changes to handling rules for motor finance complaints

The UK Financial Conduct Authority (FCA) has published a policy statement on changes to handling rules for motor finance complaints. The FCA consulted on proposed changes in Chapter 11 of CP25/27, and this aspect of the consultation closed on 4 November to allow time to finalise any changes and give firms notice before the current extension in the rules for handling motor finance complaints ended on 4 December. The FCA confirms that it is:

• Excluding leasing complaints from any further extension, meaning that firms need to start sending final responses to them from 5 December.
• Further extending the time firms have to send final responses to all other relevant discretionary commission arrangement (DCA) complaints and non‑DCA commission complaints to 31 May 2026 (two months earlier than consulted on). This is so firms will not have to start sending final responses before the FCA has decided whether the redress scheme will go ahead, and which complaints will be covered if it does, without making consumers wait any longer than necessary for a complaint response if they do not fall within any scheme.
• Requiring firms to update their public facing communications to reflect the changes to the time limits, reverting back to the usual six months that consumers will have to refer a complaint to the Financial Ombudsman Service for final responses sent after 29 January 2026.
• Extending record keeping and retention requirements until 11 April 2031.

Firms affected by these changes must ensure that they continue to comply with the rules in Appendix 5 of the Dispute Resolution: Complaints Sourcebook (DISP App 5) that are relevant to their business and are encouraged to read 'Information for firms on motor finance complaints' for more information. Firms dealing with complaints about leasing agreements (which are excluded from any potential redress scheme) must comply with the usual complaint handling rules in DISP, including, from 5 December, the complaint time limit rules in DISP 1.6.

The FCA's consultation on the potential consumer redress scheme closes on 12 December and the FCA expects to announce whether it will go ahead with a redress scheme by the end of March 2026. A dear CEO letter reminds firms to engage with the FCA in an open and cooperative way, notifying the FCA promptly of anything that could materially affect their ability to meet their obligations. If a firm fails to prepare adequately or cooperate fully, the FCA state they will take appropriate regulatory action.

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