FCA response to HoL FRSC confirms scope and modelling approach for proposed motor finance redress scheme
The Financial Conduct Authority (FCA) has published a letter by its chief executive, Nikhil Rathi, in response to the House of Lords Financial Services Regulation Committee’s (FSRC) questions on the proposed motor finance redress scheme. The FCA stated that complaints dating back to 2007 may be eligible, referencing Canada Square Operations Ltd v Potter [2023] UKSC 41, which held that deliberate concealment of commission arrangements can suspend the statutory limitation period under the Consumer Credit Act 1974. It indicated that a structured redress scheme may offer a more consistent and efficient approach than resolving complaints through litigation or the Financial Ombudsman Service (FOS), and noted that while the Court of Appeal’s October 2024 ruling caused short-term disruption, the motor finance market has since stabilised. A cost-benefit analysis and further modelling is set to be published alongside the consultation in October 2025.