In PS25/18: Changes to handling rules for motor finance complaints, the FCA confirms further temporary changes to the complaint handling rules for motor finance complaints. These changes are designed to manage how firms deal with complaints linked to commission arrangements in motor finance agreements, while the FCA finalises its position on a proposed industry-wide consumer redress scheme.
The policy statement represents the next step in a sequence of FCA interventions intended to balance consumer protection, legal uncertainty and operational pressures on firms arising from increased complaint volumes and ongoing litigation risks.
Background
The FCA’s scrutiny of motor finance complaints has intensified following concerns about the use of Discretionary Commission Arrangements (DCAs) and other commission models that may not have been adequately disclosed to consumers. These concerns were amplified by court judgments highlighting potential unfairness and a lack of transparency in historical motor finance agreements.
In response, the FCA introduced a series of temporary complaint handling measures during 2024, including extended response times and restrictions on complaint progression to the Financial Ombudsman Service (FOS). These measures were intended to ensure consistent outcomes while the FCA assessed the need for a centralised redress mechanism.
PS25/18 builds on these earlier interventions by refining the scope and duration of the temporary rules and clarifying how different categories of motor finance complaints should be managed.
Key Changes Introduced by PS25/18
- Resumption of Final Responses for Leasing Complaints
A significant change under PS25/18 is the requirement for firms to resume issuing final responses to motor finance leasing complaints from 5 December 2025. Leasing agreements are not expected to fall within the scope of the FCA’s proposed redress scheme. Accordingly, the FCA has determined there is no longer regulatory justification for delaying complaint outcomes in this area.
Firms must revert to standard expectations under DISP 1.6.2R, including the timely issuance of final responses and signposting to the FOS, where applicable. Complaint handling teams should be adequately prepared for this change, especially where leasing complaints have been held in abeyance.
- Extended Handling Period for Commission-Related Complaints
For other motor finance complaints involving commission arrangements, including both DCAs and non-DCA commission structures, PS25/18 confirms an extension to the temporary complaint handling rules. Firms are permitted to delay issuing final responses while the FCA completes its work on the proposed redress scheme and determines:
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- Whether the scheme will proceed, and
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- Which types of complaints will fall within its scope.
This approach is intended to avoid firms issuing final responses that may later conflict with the requirements of a redress scheme or lead to inconsistent consumer outcomes.
- Revised End Date for the Temporary Measures
The FCA has now confirmed a firm end date of 31 May 2026 for the temporary complaint handling measures. This date, brought forward from earlier proposals, reflects the FCA’s intention that consumers should not experience unnecessary delays once regulatory clarity is achieved.
This deadline acts as a backstop. If a redress scheme is introduced earlier, alternative complaint handling requirements may apply. Firms must ensure they are operationally ready to resume normal complaint handling from 31 May 2026 without further regulatory forbearance.
- Financial Ombudsman Service Referral Timeframes
The FCA has clarified how the changes affect the six-month time limit for referring complaints to the FOS. For final responses issued after 29 January 2026, the standard referral period under DISP 2.8.2R(2) will apply. This change marks a return to the usual framework, removing the previously extended referral periods. Final response letters must reflect the correct referral deadlines to avoid procedural breaches.
Impact on Firms
PS25/18 has important implications for firms operating in the motor finance market, including lenders, credit brokers and motor dealers. Firms will need to manage more complex complaint handling arrangements, including separating complaints by product type and commission structure, applying different approaches to leasing and commission-related complaints and ensuring clear and transparent communications with customers where complaints remain on hold. Strong governance will be essential, with senior management maintaining oversight of decisions taken under the temporary regulatory provisions.
Next Steps
The FCA has emphasised that these measures are designed to support, rather than disadvantage, consumers, by promoting fair and consistent outcomes ahead of any formal redress scheme.
While firms may delay final responses under the current rules, they must continue to:
- Acknowledge complaints promptly;
- Provide regular and meaningful updates; and
- Demonstrate the fair treatment of customers, even during periods of delay.
Looking ahead, firms should use this transitional window to:
- Update complaint handling policies and procedures;
- Train staff and prepare internal systems for redress implementation; and
- Closely monitor FCA developments, particularly ahead of the expected publication of final redress scheme rules in March 2026.
How Complyport Can Help?
PS25/18 represents a recalibration of the FCA’s approach to motor finance complaints, balancing regulatory certainty with consumer protection. Firms should use this period as a transitional phase to prepare for the expected introduction of a formal redress scheme in 2026.
We support firms by:
- Interpreting PS25/18 and Designing Compliant Complaint Handling Frameworks:We help firms understand how the temporary DISP changes apply across different motor finance products, including the distinction between leasing complaints and commission-related complaints. By mapping regulatory requirements to your existing complaint processes, we support the development of clear,compliant and practical handling models that minimise regulatory and conduct risk.
- Strengthening Governance, Policies and Senior Management Oversight:Complyport works with Compliance and Senior Management teams to update complaint handling policies, escalationframeworks and decision-making controls. This ensures complaints paused under regulatory permission are properly justified, documented and overseen, with clear audit trails and accountability aligned to FCA expectations.
- Customer Communications and Fair Treatment Assurance:We support firms in reviewing and refining complaint communications to ensure customers receive clear explanations,timely updates and appropriate signposting throughout the complaint lifecycle. This helps firms demonstrate fair treatment, even where final responses are delayed, and reduces the risk of FOS challenges or supervisory scrutiny.
- Operational Readiness for Redress and Ongoing Monitoring:As the FCA progresses towards a potential redress scheme in 2026, we help firms prepare data,systems and resourcing models to support future redress calculations and implementation. We also design proportionate monitoring and assurance frameworks to maintain compliance with DISP and Consumer Duty expectations during and after the temporary measures.
Contact Us
To understand how PS25/18 may impact your complaint handling arrangements, or to explore how Complyport can support implementation, governance and readiness for future redress requirements, get in touch to arrange a discussion with one of our Subject Matter Experts.
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