On 8 May 2026, the Financial Conduct Authority (FCA) published a new webpage setting out further advice for firms and consumers in light of the legal challenges to its motor finance compensation scheme.

Among other things the FCA states that firms should continue to prepare for the scheme until the regulator communicates otherwise. It adds that work that can be done now and would likely be needed in all scenarios includes:

  • Identifying relevant complaints and agreements.
  • Gathering the data needed to identify commission arrangements and disclosure practices, including where information is held by brokers.
  • Working with claims companies to resolve instances where consumers are represented by more than one party. 
  • Cooperating fully and promptly with the Financial Ombudsman Service on any existing complaints that have been referred to it. 

The FCA also adds that:

  • To help it better understand firms’ approaches, they should still submit implementation plans by 12 May. The FCA recognises they may need to qualify those plans and therefore the FCA will not insist on receiving formal attestations by 12 May. Lenders should speak to their FCA supervisor if they have any concerns.
  • It will be pragmatic and will not require firms to communicate to customers as required by the scheme timetable. The FCA will keep this under review as the Tribunal timetable becomes clearer.

The FCA also discusses contingency planning, noting that it is important that all involved also focus on contingency plans and prepare for the alternative scenario of no scheme. The FCA has not yet made any decisions on what it will do under various scenarios. It has, however, issued an initial set of indicative assumptions for a no scheme scenario.