FCA's Nikhil Rathi on what car loan commission review expects to find

The Financial Conduct Authority has certainly found "issues" in the ways that motor finance was offered or incentivised in the past and the ongoing review will determine the breadth of those issues, and what system of redress will be needed.

That's according to FCA chief executive Nikhil Rathi, who gave an update on the progress of the finance and insurance regulator's investigation into historic car loan commissions on the latest Inside FCA Podcast.

The regulator has just extended the timescale of its review, which was triggered by ombudsman cases regarding discretionary commission arrangements and disclosure to buyers, into spring 2025.

Rathi said: "By May next year, May 2025, when we will have the opportunity to have looked at all the data, understood what the courts have said as well, and one of the possibilities, although we haven’t taken a final decision yet, is that we might put in place what we call a redress scheme, which is a scheme that applies across the market, or part of the market, and allows for a consistent way to manage redress for consumers.

"If we go down that route that has to be consulted upon and it takes time to put together. And so on a precautionary basis we have extended a pause in complaints all the way to December 2025, but obviously if we can go quicker, we absolutely will."