On 4 March 2026, the Financial Conduct Authority (FCA) issued a statement that the proposed compensation scheme with regard to motor finance will include an implementation period, if it proceeds with a scheme.
Background
Following the Supreme Court judgment in the Hopcraft, Wrench and Johnson case on 1 August 2025, the FCA consulted on a redress scheme (CP25/27) for motor finance consumers who were treated unfairly as a result of certain arrangements not having been disclosed to them. The consultation closed on 12 December 2025.
The FCA is now considering over 1,000 responses to the proposals set out in CP25/27, set to release final decisions on a redress scheme in late March 2026.
Summary
In its statement, the FCA has set out ways it intends to streamline the consumer journey and make it smoother for firms to operate:
- Implementation period – the FCA is likely to introduce an implementation period of 3 months, with up to 5 months for older agreements.
- Streamlined process – those who complain before the scheme starts would no longer be asked if they wish to opt out, instead being told within 3 months by their lender whether they are owed compensation and if so, how much they are entitled to. Consumers who receive a redress offer would be able to accept it immediately, rather than waiting for a final determination. The FCA indicates that firms would not be required to write to customers via recorded delivery.
Next steps
If the FCA proceeds with the redress scheme, final rules are expected to be published in late March. The FCA has noted that the date will be confirmed in advance, and the timing of the publication will be outside of market hours.