Watchdog brings forward deadline for car finance companies to deal with complaints – The Irish News

The UK’s financial watchdog said car finance companies should start handling complaints two months earlier than initially planned as they finalize a compensation plan for those affected by the mis-selling saga.

The Financial Conduct Authority (FCA) will lift the pause on handling certain car finance complaints on May 31, rather than the July 31 deadline it previously proposed.

Firms should already be investigating complaints, but have not needed to respond to them since the FCA suspended the process in January 2024.

The goal was to avoid disorder and inconsistency while developing plans for an industry-wide compensation system.

“It is likely that we will implement a system and complaints that fall under it will be dealt with under specific rules, which will include time limits for their processing,” the FCA said in an update on Wednesday.

The proposed scheme will compensate motorists who were unfairly sold a car loan between 2007 and 2024 because they were not properly informed of the commission paid to brokers, including car dealers.

The regulator’s plans, which are expected to allow around 14 million transactions eligible for compensation, have encountered significant resistance from lenders.

Consultations are currently underway on the details of the project, which is expected to launch early next year.

The FCA said ending its pause on handling complaints two months earlier than planned would give firms enough time to be ready to respond.

It expects the majority of complaints to fall within the scope of its redress system – but businesses will also need to be prepared to respond to those that do not.