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Our latest Consumer Finance regulation update highlights key developments in motor finance and retail insurance. The FCA, following the Supreme Court's Hopcraft and Johnson decision, is progressing with an industry-wide redress scheme for unfair motor finance practices, with a consultation now open. Lenders could pay up to £8.2 billion in compensation to consumers in 2026. In retail insurance, Which? submitted a super-complaint to the FCA on 23 September 2025, citing poor outcomes in home and travel insurance and urging enforcement against non-compliant insurers. We also examine the risks of Home Purchase Plans compared to traditional Regulated Mortgage Contracts under UK law. Some of these initiatives introduce strict requirements and deadlines that firms should monitor to ensure regulatory compliance.
Motor finance consumer redress- what lenders need to know ahead of the new scheme
On 7 October 2025, the Financial Conduct Authority (FCA) published a statement and consultation paper (CP25/27) on the Motor Finance Redress Scheme. The consultation is published in response to the FCA's review which found widespread failings on how motor finance firms disclosed commission payments and commercial ties between lenders and brokers. In this article we set out the key elements of the proposed redress scheme and what is expected of relevant firms in the run up to the launch of the scheme next year. We also share our insights on the considerations for implementation and the operationalisation of the scheme by lenders.
Read our insights on the proposed motor finance consumer redress scheme.
Recent developments in the retail insurance market and considerations for firms
The retail insurance industry has been under significant scrutiny in recent years. In July 2025 the Financial Conduct Authority (FCA) published a package of reports on how the retail insurance market is working, which identified that more work is needed to improve claims and pricing practices to deliver better, consistent outcomes for customers. On 23 September 2025, Which? issued a super-complaint to the FCA, highlighting poor consumer outcomes in home and travel insurance. The super-complaint accuses the regulator of failing to address non-compliance by insurers and calls for urgent enforcement action to ensure firms meet their legal obligations. In this issue we explore some of these recent developments in the retail insurance market and the relevant implications for firms.
Understanding regulatory risks in Home Purchase Plans vs. traditional Regulated Mortgage Contracts
Home Purchase Plans (HPPs) are an alternative to traditional mortgage products, often structured to comply with Sharia principles. This article focuses on the 'Diminishing Partnership Arrangement' which is considered a HPP but is not the only type of HPP contract available. The use of HPPs is not limited to Islamic finance, and any business is able to make use of them by structuring transactions to fit within the rules. While HPPs share some similarities with Regulated Mortgage Contracts (RMCs), they also present unique regulatory risks. In this article we summarise the key risks associated with HPPs and compare them to traditional RMCs under UK law.
Click here to learn the key risks associated with HPPs and how they compare to traditional RMCs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
