FCA to Release UK Motor Finance Redress Plan on March 30
The Financial Conduct Authority will give an update on March 30 about a redress package. Millions of consumers may be affected by mis‑sold motor finance, the regulator said. Nikhil Rathi, the FCA chief executive, told a parliamentary committee the timetable.
FCA to Release UK Motor Finance Redress Plan on March 30. Officials said details will appear shortly after markets close.
Background of the proposal
Last October the FCA proposed a compensation package of about 11 billion pounds. The regulator says lenders did not properly disclose commissions paid to dealerships.
The alleged practices covered brokered car loans from 2007 to 2024. The FCA says those ties encouraged brokers to charge higher loan costs.
Industry reaction and concerns
The proposals have drawn criticism from industry participants and some consumer groups. Several lenders warned the FCA could face legal challenges.
- Lloyds
- Santander
- Close Brothers
- Barclays
- Finance arms of car manufacturers
Industry sources said the regulator’s methodology used a broader definition of unfair loans. They also flagged a lower bar for what counts as excessive commissions.
Financial and operational impacts
Some firms have increased their financial provisions ahead of the formal plan. Lloyds has set aside almost 2.0 billion pounds for potential redress.
Close Brothers faced a short‑seller report from Viceroy Research alleging it misrepresented exposure. The lender said it strongly disagrees with that report.
Close Brothers plans to cut about a fifth of its workforce by 2027. Its shares fell by more than 10 percent after the allegations surfaced.
Next steps and consultation
Rathi said the FCA may refine proposals if it receives strong, evidence‑based feedback. The regulator is under pressure from government and the industry to get the approach right.
Markets and firms will watch the March 30 update closely. The outcome will shape one of Britain’s most costly mis‑selling cases.
For context, the FCA estimated the package at roughly 11 billion pounds, about $14.74 billion at the cited exchange rate. The conversion used $1 = 0.7463 pounds.
