Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what sanctions are currently available to the Financial Conduct Authority if lenders fail to meet their obligations under the motor finance redress scheme; and whether the Treasury plans to review the adequacy of those sanctions.

It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.

The Financial Conduct Authority (FCA), as independent regulator, has set out its proposals for a motor finance redress scheme. In its consultation, the FCA has set out how it expects consumers to be appropriately redressed. The FCA also sets out proposals on how firms should support vulnerable consumers, and address any gaps in their records, and what controls should be in place to ensure they operate the scheme in a fair and transparent way.

Throughout the consultation period which closed on December 12, the government has encouraged all stakeholders to fully engage with the process so that their views can be considered by the FCA. The FCA has indicated it will finalise the rules of the scheme in February or March 2026.