The UK's Financial Conduct Authority (FCA) announced it will resume handling motor finance complaints on May 31, 2026. This date represents a two-month acceleration from the previously proposed deadline. The move comes as the FCA finalizes a compensation scheme designed to address widespread concerns regarding the mis-selling of motor finance products.

The initial pause on complaint handling was implemented to allow the FCA to focus on establishing a robust framework for compensating consumers affected by the scandal. The mis-selling issue centers around how firms classified customers’ income when assessing their ability to repay loans, potentially leading to unaffordable credit agreements. Investigations revealed that certain firms may have used discretionary commission schemes that incentivized brokers to prioritize commission over the customer's best interests.

The FCA has been working closely with lenders and consumer groups to develop a comprehensive redress scheme. Details of the scheme, including eligibility criteria and the compensation process, are expected to be released in the coming months. The accelerated resumption of complaint handling aims to ensure that consumers can still pursue individual claims even as the compensation scheme is being implemented. Affected consumers are encouraged to gather relevant documentation and prepare their complaints in advance of the May 2026 deadline.

The FCA's decision marks a significant step in resolving the motor finance mis-selling scandal, which has impacted a substantial number of consumers across the UK. Further updates regarding the compensation scheme and complaint handling process will be provided by the FCA as they become available.