Lenders urged to prepare for surge in complaints amid calls for fair customer outcomes
Banks are under growing pressure to strengthen their motor finance complaint-handling processes following a high-profile appearance by Financial Conduct Authority (FCA) chief executive Nikhil Rathi on ITV’s The Martin Lewis Money Show.
The discussion touched on the issue of undisclosed commissions in motor finance agreements, which could see millions of UK consumers eligible for compensation.
During the programme, Rathi indicated that a full redress scheme for affected consumers is now more likely, though its scale may not reach the £30 billion cost of the payment protection insurance (PPI) scandal. He also acknowledged the operational challenges banks face in managing the anticipated surge in complaints, which prompted the FCA to extend the deadline for case reviews to December 2025.
“The FCA’s recent extension of the timeframe for handling motor finance complaints gives banks more time to get their house in order, but they can’t rest on their laurels,” said Sam Riordan (pictured), executive director of banking and payments at consultancy Capco. “They must establish the necessary infrastructure to handle the expected influx of complaints, ensuring fair and efficient outcomes for consumers.”
The motor finance redress issue has parallels to the PPI mis-selling scandal, where banks implemented extensive operational programmes to process claims.
“It’s crucial for banks to set themselves up correctly, both to ensure consumers receive redress as quickly as possible and to manage operational demands efficiently while avoiding reputational damage,” Riordan said.
Technology could play a key role in improving the process, Riordan added. He pointed to the use of tools like chatbots to log initial complaints, data analytics to assess impacted consumers and redress amounts, and generative AI to review and resolve cases.
“Going further, technologies such as call transcription, sentiment analysis, and vulnerability identification can enhance customer outcomes while reducing the resource burden on banks,” he said.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
