Santander challenges FCA redress plans

In the strongest signal yet that motor finance lenders are at loggerheads with the Financial Conduct Authority (FCA) over its proposed redress scheme for discretionary commission arrangements (DCAs) and car loan misselling, Santander UK has decided not to publish its scheduled third quarter 2025 results announcement, which had been due on October 29, “pending greater clarity regarding the FCA’s proposals and their potential impact on Santander UK and the wider market.”

Announcing the decision to the London Stock Exchange, Santander UK said it is “reviewing the consultation in detail to understand its potential implications noting that the FCA’s proposed approach differs in important respects from the Supreme Court’s ruling, the legal basis for the redress scheme’s relevant period is not clear and it remains at the consultation stage.”

As a result, the lender said, “there is therefore uncertainty regarding the final scope, methodology and timing of any redress scheme that may ultimately be implemented.”

Santander UK anticipates being in a position to provide further information in connection with its fourth quarter 2025 results.

While the bank does not suggest it will need to increase its existing provision for compensation payments, currently £295 million, it says “even in a severe downside scenario”, it does not expect any potential increase to the existing provision would have a material adverse impact on its capital or liquidity positions, operations, financial condition, or prospects.

Instead, the lender says it wants to focus on fair outcomes for its customers, and will “continue engaging constructively with the FCA, HM Treasury and other stakeholders throughout this process.”

Santander UK Chief Executive Mike Regnier said: “We believe that the level of concern in the industry and market is such that material changes to the proposed FCA redress scheme should be an active consideration for the UK Government.

“Without such change, the unintended consequences for the car finance market, the supply of credit and the resulting negative impact on the automotive industry and its supply chain could significantly impact jobs, growth and the broader UK economy. This could also cause significant detriment to the consumer.

“While the FCA considers the outcome of its consultation, we believe it is our duty to do all we can to secure an orderly and fair outcome from this consultation process. This is not a question of investor versus customer interest, quite the reverse. What is at stake is the supply of credit that customers need and that supports a very important sector for the economy.”