Millions of UK consumers will face longer waits for payouts from the £11bn motor finance redress scheme after the Financial Conduct Authority granted banks more time to prepare. Lenders will receive between three and five months to implement the program before contacting customers who took motor finance over the past two decades.

The extension addresses lender concerns about insufficient preparation time for what could be the UK's largest financial redress scheme. The dispute centers on undisclosed commissions paid by lenders to car dealerships, which courts ruled incentivized higher interest rates. The FCA estimates 14.2mn loans dating back to 2007 will be eligible for compensation.

Despite the delay, the regulator streamlined the process for consumers who have already complained, allowing faster responses and multiple contact channels. The FCA emphasized that consumers should complain directly rather than through claims management companies, which typically take over 30 percent of compensation. With more than 1,000 responses to its proposals still under review, final rules are expected by month's end.