(Reuters) -Britain’s financial regulator on Wednesday extended a deadline for feedback on a proposed compensation scheme for consumers who were mis-sold car finance, as consumer groups and lenders called for more time to analyse its market data.
The Financial Conduct Authority has estimated that the mis-selling scandal will cost lenders around 11 billion pounds ($14.76 billion), which would make it one of the biggest compensation bills to hit the financial sector.
But amid pushback from banks and some lawmakers, the regulator has now delayed the consultation closing date to December 12 from November 18. It expects to publish its final rules in either February or March 2026.
The FCA said industry feedback included questions around its methodology for calculating redress, the time period for the scheme, the rate of compensatory interest, how independent mechanisms will ensure confidence, how smaller firms can operate the scheme cost-effectively and how to prevent fraud.
Several lenders have set aside cash to cover the cost of compensation, including Lloyds Banking Group, which has announced provisions of almost 2.0 billion pounds.
Santander has set aside 295 million pounds but has yet to update its estimate. It scrapped the publication of its full UK results last month.
The redress scheme is designed to compensate consumers for around 14.2 million motor loan deals that broke laws and regulations between 2007 and 2024 by failing to adequately disclose commission and contractual ties between lenders and car dealerships.
($1 = 0.7451 pounds)
(Reporting by Yadarisa Shabong in Bengaluru and Kirstin Ridley in London; Editing by Joe Bavier)
