https://www.fca.org.uk/cy cy https://www.fca.org.uk/news/news-stories/fernwood-financial-limited-enters-liquidation On 27 June 2025, Fernwood Financial Limited – a high-cost lending firm – entered liquidation. Michael Howarth of Aurora Equity & Development Limited was appointed Liquidator. Fernwood Financial Limited was a high-cost lender based in the northwest of England. The firm is no longer lending and has now stopped all collections. The Liquidators are writing to all current customers informing them that their loan balances have been written off in full.Customers do not need to make any further payments to the firm. Customers should cancel any automated payments with their bank and should contact the liquidators immediately if anyone contacts them seeking payment.If you have any questions regarding your loan, please contact the Liquidators via email on sk@aurorarecovery.co.uk and hello@aurorarecovery.co.uk or by telephone on 01134 800397.The FCA is in regular contact with the firm and the Liquidator regarding the fair treatment of customers.Customers who are struggling financially can get free and impartial guidance from MoneyHelper.Be alert to scams All customers should remain alert to the possibility of fraud. If you're contacted unexpectedly by someone claiming to be from Fernwood Financial or Aurora Recovery, please end the call and contact them using the details above. Find out more about protecting yourself from scams. If you're looking for an alternative firm to provide a loan, you should only deal with firms authorised by us. If you're unsure whether a firm is authorised, check the Financial Services Register. News stories Thursday, August 21, 2025 - 10:39 FCA 154201 https://www.fca.org.uk/news/news-stories/forest-savers-enters-administration On 19 August 2025, Waltham Forest Council Employee Credit Union (WFCECU) – trading as Forest Savers – entered administration and has now stopped trading. Dina Devalia and Terri Mulgrew of Quantuma Advisory Limited have been appointed as joint administrators. WFCECU is a financial co-operative owned by its members. It is regulated by us and the Prudential Regulation Authority (PRA) under Firm Reference Number (FRN) 213408 as a deposit-taker.The Financial Services Compensation Scheme (FSCS) is stepping in to protect members. It will return members’ money within 7 working days from when WFCECU was declared in default, on 19 August 2025. News stories Tuesday, August 19, 2025 - 10:00 FCA 154046 https://www.fca.org.uk/news/news-stories/sustainability-linked-loans-market-2-years Sustainability-linked loans (SLLs) remain a useful transition financing tool, and we are encouraged by the progress we've seen in the market since 2023. We've published a follow-up letter (PDF) to share insights from our ongoing engagement with banks active in the SLL market, as part of being a smarter regulator and to deepen trust in the market.SLLs can be a useful transition financing tool for borrowers wanting to improve their overall sustainability performance.Since our previous letter in 2023 (PDF), which highlighted some concerns, we've seen the market for SLLs mature, with better practice and more robust product structures.There are still barriers to scaling the SLL market and some concerns around incentives, but the improvements we've observed are important steps in the development of a credible transition finance ecosystem.Two years on, we hope these insights will help a wider group of firms in the SLL market learn from both the experience of others and our observations.Next stepsOur strategy 2025 to 2030 (PDF) sets out our role in supporting the growth of the financial services sector and UK economy. A crucial aspect of this is unlocking the sector's potential to channel capital into managing the risks and opportunities of the transition to net zero.We will continue to monitor the SLL market as part of our wider work on transition finance, and welcome further constructive dialogue with banks.We will also work closely with the Transition Finance Council (TFC) to promote the competitive position of the UK as a transition finance hub, in line with the Government's ambitions.We encourage banks to engage collaboratively with the TFC's work, to build alignment in approaches to transition finance. News stories Thursday, August 14, 2025 - 14:01 FCA 153656 https://www.fca.org.uk/news/blogs/evolution-consumer-credit-what-next-decade-holds Our 2024 Financial Lives survey found that 84% of UK adults (45.7 million people) held at least one credit or loan product in the previous 12 months. But for some, credit isn’t about luxuries – it’s about getting by.5% (2.8 million) had persistent credit card debt, meaning they paid more in interest and charges than they paid off.21% (11.4 million) had been overdrawn at some point in the past year.Of those with personal loans, 10% - equivalent to around 1.6 million UK adults - used them to cover everyday expenses like food, travel, or rent.These figures show how deeply embedded credit is in daily life – and the complexities involved when it becomes a lifeline rather than a tool.What we’ve learnedOver the years, we’ve listened to consumers, firms, and community organisations. Three key lessons stand out:Credit isn’t always the answer. For some, the right support might be getting help with managing your money, checking benefits or finding work - not another loan. Signposting consumers to help is an appropriate outcome - which also aligns with the Consumer Duty.Technology has transformed the sector – especially when it comes to spotting harm. Digital tools may have made credit more accessible, but it can also be used to spot early signs of financial difficulty. We recently echoed this in our call for improvements to digital loan processes, highlighting the need for fairer, more transparent online journeys.The best results happen when we work together - and that means traditional banks, fintechs, community lenders and mutuals, and the rest of the commercial sector. Take our 2024 Financial Inclusion Tech Sprint, where one of the winning collaborations between community lender Moneyline and fintech Inbest.ai developed a signposting toolkit for customers declined for credit. The tool offers tailored referrals to debt advice, income maximisation resources, and social tariffs – and in some cases, provides small crisis grants to those most in need. It’s a powerful example of how innovation and partnership can deliver meaningful support beyond credit.How did we get here?We took over responsibility for consumer credit in 2014. Since then, we’ve concentrated on raising standards. We introduced the high-cost-short-term-credit price cap, which has benefitted 760,000 customers, saving them £150m annually. We strengthened support for borrowers in difficulty and acted against firms not getting it right. Both the Senior Managers & Certification Regime and the Consumer Duty have also built a strong foundation for a fairer, more resilient and more innovative consumer credit sector all round.Some firms have thrived adapting to these reforms. Others ended up leaving the market -particularly high-cost credit firms. While this has reduced harmful practices, it’s also made access to credit more difficult for some, highlighting the complexity of consumer needs.What’s the plan for consumer credit over the next decade?If the last decade was about raising standards, the next must be about forging a better outlook.This is tied to our mission in our 5-year strategy of supporting growth and helping consumers navigate their financial lives. Because a healthy, innovative consumer credit sector can protect consumers and help them – and firms – to thrive.Three priorities will guide our work:Innovation that adds real value. The best financial products are intuitive, transparent and genuinely useful. Simplicity unlocks confidence and economic activity.Vulnerable customers getting compassionate support. This is non-negotiable. Any one of us can face hardship. The difference between recovery and crisis often lies in how firms respond.People need credit that’s both accessible and right for them. Getting that balance right between access and protection is essential – not just for individuals, but the whole economy. We’re playing an active role in the Government’s Financial Inclusion Committee, helping to shape policies that promote fair access to affordable credit and financial services – particularly for those most at risk of being turned down and left out.There’s no single solution. But by working together – regulators, firms and communities – we can nurture a system that supports consumers at each stage of their financial lives.We invite all firms to be part of this conversation and the solutions it inspires. Together, we can shape a fairer, more resilient financial future. Blogs Thursday, August 14, 2025 - 12:18 FCA 153501 https://www.fca.org.uk/news/news-stories/trust-financial-planning-ltd-enters-liquidation On 7 August 2025, Paul Stanley and Dean Watson of Begbies Traynor (Central) LLP were appointed as joint liquidators of Trust Financial Planning Ltd. On 19 March 2025, Trust Financial Planning became subject to voluntary requirements, including stopping all regulated activity. See a full list of the restrictions on the Financial Services Register. The firm agreed to these voluntary requirements because we considered it was failing to meet our Threshold Conditions. Our Threshold Conditions represent the minimum standards that firms must satisfy to carry out regulated activities in the UK.The firm’s director has taken advice about its financial position and decided to put the firm into creditors’ voluntary liquidation (CVL). The firm’s creditors and shareholders have appointed Paul Stanley and Dean Watson, of Begbies Traynor, as joint liquidators. The liquidators will now wind up the company and its affairs. Find out more on GOV.UK. News stories Thursday, August 14, 2025 - 11:30 FCA 153746 https://www.fca.org.uk/news/news-stories/firms-ready-t-1-uk-europe As firms prepare for the move to T+1 on 11 October 2027, we’re updating firms on our expectations and plans. Jamie Bell, the FCA’s interim head of capital markets, took part in a fireside chat with Richard Monks of EY at the Accelerated Settlement Taskforce (AST) industry event, ‘The Journey to T+1 in the UK and Europe – will you be ready?’, hosted by EY on 16 July 2025.The event marked almost 6 months since the AST published its T+1 UK Implementation plan. It focused on market participants’ preparations for the UK move to T+1 on 11 October 2027.A poll taken at the event indicated that approximately 87% of respondents had already identified the changes they need to make to prepare for T+1.Jamie explained how initial engagement with market participants has been positive and we are largely satisfied with preparations with T+1 so far.Other topics included: How automation is important for an efficient settlement process and market participants’ plans support this.While the FCA is playing a supportive role to the market, we will act if firms are not prepared for the October 2027 deadline.In response to an audience question, Jamie described how the FCA cannot meet with all relevant authorised firms.Our work should be seen as part of a broader market initiative to communicate about T+1, including by firms through their client engagement.Find out how to prepare for T+1 News stories Thursday, August 14, 2025 - 10:18 FCA 153756 https://www.fca.org.uk/news/news-stories/beware-car-finance-scam-calls-fca-warns Scammers are pretending to be car finance lenders and falsely claiming that people are owed compensation. Following our announcement that we’ll consult on a potential car finance compensation scheme, we've received reports of scammers contacting people.These fraudsters are asking individuals for personal information including their name, address, date of birth and bank details. They then falsely claim that these people are owed compensation.It's important to remember:There's no car finance compensation scheme in place yet.Car finance lenders are not yet contacting customers about compensation.How to protect yourselfIf you receive a call like this, hang up immediately and do not share any information.Report scam calls and texts to Ofcom by forwarding them to 7726. More information on how to do this is available on Ofcom’s website.Find out how to protect yourself from scams. News stories Monday, August 11, 2025 - 13:14 FCA 153426 https://www.fca.org.uk/news/blogs/leveraging-non-bank-sector-good-times-and-bad Non-banks encompass a wide range of business models, including pension funds, insurers, hedge funds, and many others. The activities of these firms are vital for the financial health and growth of the UK economy.Therefore, making sure these firms are resilient and financially stable ensures they provide consumers and businesses with the services they need – in both good times and bad.Non-banks use leverage (borrowing to invest) to increase exposure, boost returns or hedge potential losses. This can be achieved in various ways, ranging from taking out loans to using complex derivatives. The use of leverage is an essential component of the deep and efficient capital markets that we have in the UK.In good times, this leverage provides extra liquidity to the system and helps maximise returns. But in periods of market stress, leverage that is poorly managed, concentrated, or hard to spot can raise instability. This is particularly true in markets that are core to the functioning of the real economy. For example, UK government debt markets, or when highly leveraged non-banks risk transferring stress to institutions like banks, which are central to the stability of the financial system.As the regulator, our role is to ensure that markets work well. Leverage is not inherently a cause for concern. But to ensure that leverage can continue to play its part in supporting the UK economy in good times and bad, we need to find ways to identify and address systemic risks - without impeding market efficiency or disproportionately burdening firms.FSB recommendationsTwo years ago, I took up a role as co-chair of the Financial Stability Board's (FSB’s) working group on non-bank leverage. This group recently published policy recommendations (PDF) seeking to identify and address financial stability risks created by non-bank leverage.Effective risk management depends on having the right information at the right time. Without it, both market participants and regulators are essentially flying blind. The report addresses this fundamental challenge by recommending stronger risk monitoring and greater market transparency.The proposed measures put forward by the FSB focus on improving how firms share critical information – both publicly and with their trading partners. These measures should give firms better insight into their own exposures and broader market conditions, helping them manage investment risks more effectively. The improvements should also provide authorities with a comprehensive view of the entire system. Having this birds-eye view enables authorities to spot risks that individual firms might not see – such as dangerous concentrations of investments or overcrowded market positions.The FSB report also provides policy options for authorities to consider once they address risks to financial stability. Given the complex and diverse nature of the non-bank sector, there's no one-size-fits-all approach – so the report sets out a number of different alternatives that authorities may wish to consider. This approach is a good one - what matters is that all jurisdictions have sufficient measures to manage systemic risk, even if different authorities choose a different set of policy tools or measures to do so.What's next for the UK?We are already working to become a smarter regulator, and we're focusing on how we collect and use data to spot risks early.To do our job, which is to make sure that markets function well, we know we need data that provides the practical insights we need to make effective, proportionate decisions.The FSB recommendations are well timed for us. We are already taking steps to evaluate what data we need and switching off regulatory reporting returns that are no longer relevant. There is an ongoing programme of work looking at our data needs – and we’ll think carefully about which risk metrics are most useful for us going forward, including how we can align with other jurisdictions.Working with our international partnersAs much of the non-bank sector operates across borders, it’s crucial that we also collaborate with our international counterparts to spot risks and potential spillovers effectively.This means engaging bilaterally on issues like information sharing and risk monitoring, while continuing to take an active role in international standard-setting bodies. In this way, we can strive for internationally consistent outcomes and be confident that we’re safeguarding the system, while still ensuring that the UK remains competitive.My time leading this FSB working group has highlighted that non-bank leverage is a particularly tricky issue to tackle, demanding in-depth knowledge, industry perspective, and extensive international cooperation. The publication of the FSB’s recommendations is a major step forward in this space – and I’m proud that the FCA has been able to play such a leading role in advancing this work. Blogs Monday, August 11, 2025 - 08:31 FCA 153331 https://www.fca.org.uk/news/news-stories/fca-shares-feedback-new-standard-setting-body-open-banking The ‘Future Entity’ is expected to be the main standards body for open banking in the UK. There has been significant progress in open banking over the past 6 months, and we want to build upon that momentum. This includes the industry-led work to establish a new organisation that will support the rollout of variable recurring payments for some types of household bills later this year. Open banking has the potential to support economic growth in the UK by making payments faster, cheaper and more efficient for people and businesses. It will also enable firms to develop products and services, which make it easier for consumers to manage their finances and pay for goods. The open banking standards provided by the Future Entity are expected to be used by commercial open banking schemes promoting innovation in the sector.The Future Entity is expected to monitor the quality and consistency of technologies used in open banking. This should help inform our supervision of firms.We will be engaging with industry and other stakeholders to decide upon the best way forward to standing up the Future Entity, helping to create a more thriving and innovative open banking industry.Matthew Long, director of payments and digital finance at the FCA, said: 'This is the next step in realising our vision of a more innovative, safe and competitive payments sector, which embraces technological change to better serve people and businesses.'We expect the Future Entity to play a central role in the next phase of open banking, setting and monitoring the standards that underpin the industry.'However, we can't realise this future alone. Our engagement and support from industry continues to play a vital role in the future of open banking, as we build on the momentum we’ve seen in the past 6 months.'More informationRead the Feedback Statement 25/4: Design of the Future Entity for UK open banking.The feedback statement follows a JROC policy paper setting out proposals for the design of the future entity for UK open banking.Open banking is a focus area for the us as set out in our recent strategy.The Future Entity is expected to provide the core standards for open banking services – API standards and oversight. We expect this body to be not for profit, and to collect revenue on an equitable basis to recover costs and invest. We plan to discuss this with industry. Separately, there will be a competitive layer of open banking schemes, which operate commercially. We expect these schemes to utilise the common API standards developed and overseen by the Future Entity, but they may innovate above these standards to provide premium services. APIs allow different firms’ software applications to communicate and interact with each other, exchanging data quickly and securely. This allows for greater data sharing.Underlying payments infrastructure provides the payments rails for open banking payments. The future of this infrastructure layer (including the governance and potential upgrades) is being led by the Payments Vision Delivery Committee and the Vision Engagement Group. News stories Friday, August 8, 2025 - 11:06 FCA 153301 https://www.fca.org.uk/news/press-releases/fca-secures-convictions-individual-ponzi-scheme Daniel Pugh has been found guilty of fraud, following a prosecution by the FCA. Mr Pugh, aged 35 and of Devon, set up a Ponzi scheme that netted over £1m. Through his fraudulent Imperial Investment Fund (IIF), Mr Pugh took money from 238 investors he targeted largely through Facebook adverts. They were offered impossibly high returns of 1.4% a day, 7% a week or 350% a year.The FCA will commence confiscation proceedings in order to recover the proceeds of crime.Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: 'Mr Pugh deliberately defrauded unsuspecting investors. Fighting financial crime is a priority for the FCA and we are committed to holding fraudsters to account.’Mr Pugh was today found guilty of one count of conspiracy to defraud. At the start of the trial he pleaded guilty to carrying out unauthorised regulated activity which breached sections 19 and 21 of the Financial Services and Markets Act 2000.A further individual remains wanted in relation to the same offences. Notes to editorsDaniel Pugh’s date of birth is 19 April 1990.The FCA has attempted to contact investors who lost out. Anyone who was scammed by IIF and has not heard from the FCA should call or email ophainesconsumercontact@fca.org.uk.The FCA’s ScamSmart page has advice on how to spot and avoid investment scams.Mr Pugh was charged on 18 July 2023.Mr Pugh’s trial took place at Southwark Crown Court.Conspiracy to defraud is an offence under common law with a maximum sentence of 10 years’ imprisonment.Under section 19 of FSMA, a person cannot carry on a regulated activity in the UK unless they are FCA authorised or exempt. Any person who breaches this is committing a criminal offence for which the maximum sentence is two years’ imprisonment.Under section 21 of FSMA, a person must not communicate an invitation or inducement to invest unless they are FCA authorised or the content of the communication is approved by an authorised person. Any person who breaches this is committing a criminal offence for which the maximum sentence is two years’ imprisonment. Press Releases Thursday, August 7, 2025 - 19:35 FCA 153311 https://www.fca.org.uk/news/press-releases/payment-safeguarding-rules-changes Consumers will be better protected when they use payment firms, with the introduction of new rules to protect their money from May 2026. These changes will improve safeguarding practices among payment firms. Safeguarding means that customer money must be kept separate from the firm’s own money so that it is available to be returned if the firm fails.Following constructive engagement with industry, the FCA has confirmed that the new rules will kick in after 9 months, giving industry time to prepare. It has also made changes to ensure that rules are proportionate for smaller firms, such as by removing the requirement for audits if a firm holds less than £100,000 in customer funds.These rules mean that consumers are better protected, and if a payment or e-money firm fails they are more likely to get a full refund and with fewer delays.The new rules require:Annual audits by qualified auditors.Monthly reporting for payment firms.Firms to conduct daily checks to make sure the right amount of money is being safeguarded to protect customers.Better planning if firms fail so customers receive their money back sooner.These rules will address issues the regulator has found in previous failures of payment firms.Payment firms that became insolvent between Q1 2018 and Q2 2023 had average shortfalls of 65% of their customers’ funds.Matthew Long, director of payments and digital assets, FCA, said: 'People rely on payment firms to help manage their financial lives. But too often, when those firms fail, their customers are left out of pocket.'Most of those who responded to our consultation agreed we need to raise standards to protect people’s money and build trust, but any changes needed to be proportionate, especially for smaller firms.'We’ll be watching closely to see if firms seize the opportunity and make effective improvements that their customers rightly deserve – this will help us to determine whether any further tightening of rules is necessary.'Notes to editorsPS25/12: Changes to the safeguarding regime for payments and e-money firms.Intended amendments to Payment Services and Electronic Money - Our Approach, May 2026 draft version.The FCA will be actively supporting industry through the implementation period to help them make changes, with webinars, events and our day-to-day supervisory work.Funds held by payment and e-money firms are not directly protected by the Financial Services Compensation Scheme (FSCS). Instead, firms must safeguard funds which can mean customers lose money or experience delays to funds being returned if the firm fails.The rules will come into effect on 7 May 2026. Press Releases Thursday, August 7, 2025 - 10:06 FCA 153156 https://www.fca.org.uk/news/statements/fca-update-all-or-nothing-investment-fraud-case We have secured a confiscation order against Reuben Akpojaro for his role in the investment fraud.In May 2025 we announced confiscation orders against Raheel Mirza, Cameron Vickers and Opeyemi Solaja. Cameron Vickers made a successful application to reduce his confiscation order. As a result, the confiscation orders secured by the FCA against the defendants total £293,726.16. This amounts to all their remaining assets.Between June 2016 and January 2020, the defendants cold called people to convince them to invest in a shell company and used the money to bankroll their lifestyles. In 2023 they were convicted and sentenced to a combined 24 and a half years for investment fraud.The money will be returned to investors at the earliest opportunity. Failure to pay can lead to imprisonment. Notes to editorsWe previously published details of the FCA's confiscation orders. Statements Tuesday, August 5, 2025 - 12:34 FCA 153016 https://www.fca.org.uk/news/press-releases/fca-fines-over-woodford-equity-income-fund The FCA has decided to fine both Neil Woodford and Woodford Investment Management (WIM) for failures in their management of the Woodford Equity Income Fund (WEIF). The FCA has decided to fine Mr Woodford £5,888,800 and ban him from holding senior manager roles and managing funds for retail investors.The FCA has also decided to fine WIM £40,000,000.WEIF was an investment fund managed by Mr Woodford and WIM. They were responsible for managing the liquidity of the fund, so that investors could redeem their investments and be repaid.The fund was suspended in June 2019, leaving investors – a significant majority of whom were ordinary retail customers – unable to access their money. The value of the WEIF had fallen from a high of over £10.1bn in May 2017 to just £3.6bn in the run-up to its suspension.The FCA has concluded that between July 2018 and June 2019 WIM and Mr Woodford made unreasonable and inappropriate investment decisions. They disproportionately sold more liquid investments (those that are easier to sell) and bought less liquid ones over this period. This meant that at the time of suspension only 8% of the investments held by WEIF could be sold within 7 days. Under rules in place at the time, investors should have been able to access their funds within 4 days.WIM and Mr Woodford did not react appropriately as the fund’s value declined, its liquidity worsened and more investors withdrew their money. This disadvantaged investors who remained in the fund, compared to those who had withdrawn their investment before the fund was suspended.The FCA has concluded that Mr Woodford held a defective and unreasonably narrow understanding of his responsibilities. Despite his senior role, he did not accept that he had a responsibility to oversee the management of the fund’s liquidity, including in interviews conducted by the FCA. He also failed to provide proper oversight of WIM’s relationship with Link Fund Solutions (Link), the WEIF’s authorised corporate director, including after Link raised concerns about the fund’s liquidity.The FCA considers Mr Woodford’s and WIM’s failings led to a significantly increased risk of the fund being suspended.Steve Smart, joint executive director of enforcement and market oversight at the FCA, said:'Being a leader in financial services comes with responsibilities as well as profile. Mr Woodford simply doesn’t accept he had any role in managing the liquidity of the fund. The very minimum investors should expect is those managing their money make sensible decisions and take their senior role seriously. Neither Neil Woodford nor Woodford Investment Management did so, putting at risk the money people had entrusted them with.’The FCA previously set out its findings against Link for its role in the suspension of the WEIF. This included securing a £230m redress scheme for those investors stuck in the fund when it was suspended.Notes to editorsDecision Notice 2025: Neil Woodford (PDF)Decision Notice 2025: Woodford Investment Management Limited (PDF) Press Releases Tuesday, August 5, 2025 - 09:00 FCA 153046 https://www.fca.org.uk/news/press-releases/fca-consult-motor-finance-compensation-scheme Motor finance customers could receive a pay out after the FCA announced it will consult on an industry-wide compensation scheme. Many motor finance firms were not complying with rules or the law by not providing customers with relevant information about commission paid by lenders to the car dealers who sold the loans.The FCA has moved quickly on steps to set up a proposed compensation scheme because it wants to provide clarity and certainty to consumers, firms and investors as quickly as possible.It also wants to ensure the integrity of the motor finance market so it works well for consumers now and in the future. The compensation scheme would balance principles including fairness, timeliness, and certainty.Nikhil Rathi, chief executive of the FCA, said:'It is clear that some firms have broken the law and our rules. It’s fair for their customers to be compensated. We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal.'Our aim is a compensation scheme that’s fair and easy to participate in, so there’s no need to use a claims management company or law firm. If you do, it will cost you a significant chunk of any money you get.'It will take time to establish a scheme but we hope to start getting people any money they are owed next year.'The announcement follows Friday’s landmark ruling by the Supreme Court, on cases in which the FCA had intervened. While some motor finance customers won’t get compensation because in many cases commission payments were legal, the Court ruled that in certain circumstances the failure to properly disclose commission arrangements could be unfair and therefore unlawful.The FCA will propose rules on how lenders should consistently, efficiently and fairly decide whether someone is owed compensation and how much. It will monitor if firms are following the rules and act if they’re not.The FCA currently estimates that most individuals will probably receive less than £950 in compensation per agreement.The final total cost of any compensation scheme will depend on the final design. That makes it hard to estimate precisely. Any estimates are only indicative at this stage and may change. The FCA thinks it unlikely the cost of the scheme, including to run it, would be much lower than £9 billion. And it could be higher, up to £18 billion in some scenarios though the FCA doesn’t believe these are the most likely. A total cost midway in the range, as forecast by some analysts, is more plausible.The consultation will launch by early October. If the compensation scheme goes ahead, the first payments should be made in 2026.People who have already complained don’t need to do anything. Consumers who are concerned that they were not told about commission and think they may have paid too much for their motor finance should complain now. Consumers do not need to use a claims management company or law firm and doing so could cost them around 30% of any compensation paid.The FCA recognises that consumers want to receive any compensation owed quickly and firms and investors want certainty. The regulator will be working intensively and engaging widely over the coming weeks on the detail of how a scheme would work.Notes to editors The full market statement: FCA to consult on a compensation scheme for motor finance customersThe Supreme Court judgment Press Releases Sunday, August 3, 2025 - 11:36 FCA 152981 https://www.fca.org.uk/news/statements/fca-consult-compensation-scheme-motor-finance-customers We will consult on an industry-wide scheme to compensate motor finance customers who were treated unfairly. Any redress scheme must be fair to consumers who have lost out and ensure the integrity of the motor finance market, so it works well for future consumers.We will publish the consultation by early October and finalise any scheme in time for people to start receiving compensation next year.Why are we proposing a redress scheme?Our detailed review of the past use of motor finance has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers. Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way.Some consumers have challenged their agreements with lenders through the courts. On Friday the Supreme Court ruled that in many cases commission payments could be legal, but a lender did act unfairly – and therefore unlawfully - due in part to the size of the commission it paid to the motor dealer and how it was disclosed.The Supreme Court agreed with several factors we had identified which could point towards an unfair relationship and fall foul of the Consumer Credit Act (CCA), whilst recognising it depends on the facts of each case.Such factors could include:the size of the commission relative to the charge for creditthe nature of the commission, for example, whether it is discretionarythe characteristics of the consumercompliance with regulatory rulesthe extent and manner of disclosureThis clarity helps us because we have been looking at what is unfair and, prior to this judgment, there were different interpretations of the law coming from different courts.We will now consult on a redress scheme. Redress would depend on non-disclosure of the factors above and the interaction between them.The principles underpinning a redress schemeWe set out in June the principles that would guide a redress scheme. These are:comprehensivenessfairnesscertaintysimplicity and cost effectivenesstimelinesstransparencymarket integrityThere may be tensions between these principles, which will require us to strike the right balance. We will explore these during the consultation.Scope and design of redress schemeWe have been carefully analysing the Supreme Court’s judgment and how it may affect the scope and structure of a redress scheme. While that work is ongoing, we want to provide as much clarity and certainty to consumers and firms as quickly as possible.Our consultation will cover how firms should assess whether the relationship between the lender and borrower was unfair for the purposes of our scheme and if so, what compensation should be paid.In the Supreme Court case and our review of past practices, the unfairness to consumers has arisen from the non-disclosure of particular features of the commission arrangements. But many of these features are not themselves unfair. And the Supreme Court said that non-disclosure or partial disclosure of the commission will not necessarily make the relationship unfair.Our consultation will, therefore, need to consider how a range of factors must be assessed together when deciding on whether the relationship was unfair. As we prepare the consultation, we will consider if and how factors such as the non-disclosure of the nature and size of the commission, tied commercial relationships and customer sophistication should be factored in.Discretionary commission arrangements and non- discretionary commission arrangementsWe will propose that the scheme covers discretionary commission arrangements (DCAs) – where the broker could adjust the interest rate offered to a customer – if they were not properly disclosed.We will also consult on which non-discretionary commission arrangements should be included. This is because the Supreme Court decision in the Johnson case, which did not include the payment of any discretionary commission, makes clear that non-disclosure of other facts relating to the commission can make the relationship unfair.Redress calculationOur methodology for calculating redress will be informed by the degree of harm suffered by the consumer and the need to ensure consumers continue to be able to access affordable loans for motor vehicles.The Supreme Court decided that the appropriate remedy in the Johnson case was the payment of the commission. We will consider this option alongside alternative approaches. It is unlikely any alternative would lead to higher remedies overall than full repayment of commission. Some could lead to lower payments.We will consult on whether there should be a de minimis threshold to be eligible for a compensation payment.InterestInterest is normally paid on redress awards. This should be fair and proportionate. In the case it upheld, the Supreme Court required a commercial rate of interest to be paid.We plan to consult on an interest rate for each year of the scheme based on the average base rate that year plus 1%. This would be in the ballpark of a simple interest rate of 3% per annum.TimeframeWe think the scheme should cover agreements dating back to 2007, to be consistent with the complaints the Financial Ombudsman can consider and to ensure the scheme is comprehensive. This would mean consumers would not need to use other routes to secure compensation and prevent large numbers of ongoing disputes in the courts. We are discussing with the Government the best way of doing this.Opt in / opt outWe have not yet decided whether to propose an opt-in or opt-out scheme. There are pros and cons to either approach and a range of views, which will be explored thoroughly through the consultation.Whichever approach we propose, we anticipate requiring firms as far as possible to make customers aware they may be eligible and what they may need to do.High commissionThe Supreme Court found that a high and undisclosed commission – in this case 55% of the total cost of the credit – was ‘a powerful indication’ of an unfair relationship. The court also found that this was a breach of our rules, as disclosure of so high a commission would have had a ‘material impact’ on the customer’s decision.We will, therefore, need to consider what size of commission in the context of the overall finance arrangements may point towards unfairness if not disclosed.Total cost of redressThe final cost of any redress scheme will depend on the final design and the factors, including those set out above.This makes it hard to estimate precisely at this stage the total cost to industry of the scheme. Any estimates are highly indicative and susceptible to change.The final cost will also depend on the take-up rate, the methodology to calculate redress and the mix of discretionary and non-discretionary arrangements ultimately included.At this stage, we think it is unlikely that the cost of any scheme, including administrative costs would be materially lower than £9bn and it could be materially higher. While there are plausible scenarios which underpin estimates of a total cost as high as £18bn, we do not consider those scenarios to be the most likely and analyst estimates in the mid point of this range are more plausible.The FCA currently estimates that most individuals will probably receive less than £950 in compensation per agreement.Market impactWe have been analysing the potential impact of a redress scheme on firms and the motor finance market. We expect a healthy finance market for new and used cars to continue notwithstanding any redress scheme we propose. We will set out more detailed analysis in our consultation and continue to monitor market functioning.Advice to firmsFirms must comply with the law and our rules. We also welcomed the industry-led practices to enhance the information provided to customers following the Court of Appeal judgment of 25 October 2024 on motor commission arrangements. Under the Consumer Duty, we increasingly monitor outcomes consumers are receiving as well as compliance with rules. Our view is that these updated practices are contributing to better consumer outcomes.Prudential rules require regulated firms to maintain adequate financial resources. Firms with listed securities must also keep the market properly informed. Each firm must make their own assessment of potential liabilities, as many have done.Firms should now refresh their estimates, ensuring they cover both liability for compensation and the administrative costs. There will remain a degree of uncertainty about these estimates until a redress scheme is finalised, but it is important that firms act and make sufficient provisions, increasing them where necessary.Complaints deadlineFirms currently do not have to provide a final response to relevant motor finance complaints before 4 December 2025. We will consult on further extending this deadline to align with the timetable for compensation payments of the proposed redress scheme.This will prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market.Advice to consumersPeople who have already complained don’t need to do anything. Our advice remains that consumers concerned that they were not told about commission and who think they may have paid too much for the finance, should complain now.We aim to make any scheme easy to participate in, without needing to use a claims management company (CMC) or law firm. Using a CMC or law firm may end up costing them up to 30% in fees of any compensation they receive.Over the last year, the FCA has required 225 promotions from CMCs on motor finance to be amended or withdrawn, including some which were highly speculative in suggesting the compensation consumers may get.We will continue to act against firms using clickbait-style promotions or language that suggests a guaranteed outcome before any investigation into a consumer’s claim has taken place. Firms must ensure that all financial promotions are clear, fair, and not misleading, and that they accurately reflect the nature and status of any potential claims.We will ensure firms handle claims consistently, efficiently and fairly.Next stepsWe recognise that consumers want to receive any compensation owed quickly and firms and investors want certainty.We will be working intensively and engaging widely over the coming weeks on the detail of how a scheme would work.We aim to publish the consultation by early October and for it to be open for 6 weeks. No final decisions have yet been taken in relation to the scheme. We aim to finalise the rules such that the scheme can launch in 2026, with consumers starting to receive compensation next year. Statements Sunday, August 3, 2025 - 07:32 FCA 152976 https://www.fca.org.uk/news/statements/fca-reaction-supreme-court-motor-finance-judgment We are working to analyse the judgment and determine our next steps. An FCA spokesperson said:'We welcome that the Supreme Court has clarified the law and are grateful to the Court for delivering the judgment after the market closed.'It will take time to digest the judgment.'We want to bring greater certainty for consumers, firms and investors as quickly as possible.'We will be working through the weekend to analyse the judgment and determine our next steps.'We said we would set out within 6 weeks whether we would consult on a redress scheme. But we want to provide clarity as quickly as possible.'So, we will confirm whether we will consult on a redress scheme before markets open on Monday 4 August.'Our aims remain to ensure that consumers are fairly compensated and that the motor finance market works well, given around 2 million people rely on it every year to buy a car.'If we do decide to propose a redress scheme, we'll consult widely. In designing a redress scheme, as we have previously said, we will balance principles including fairness, timeliness, and certainty.' Statements Friday, August 1, 2025 - 17:00 FCA 152961 https://www.fca.org.uk/news/press-releases/fca-opens-retail-access-crypto-etns Firms will soon be able to give retail consumers access to crypto exchange traded notes (cETNs), under changes announced by the FCA. Crypto ETNs that retail consumers can access must be traded on an FCA-approved, UK-based investment exchange (a Recognised Investment Exchange or RIE). Financial promotion rules will apply so consumers get the right information and aren’t offered inappropriate incentives to invest. David Geale, executive director of payments and digital finance at the FCA, said:'Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood. In light of this, we’re providing consumers with more choice, while ensuring there are protections in place. This should mean people get the information they need to assess whether the level of risk is right for them.'The Consumer Duty will apply to firms offering these products to retail investors. However, there won’t be coverage from the Financial Services Compensation Scheme (FSCS). Consumers should ensure they understand the risks before deciding to invest.This is the latest development as the FCA continues to establish a regulatory framework for crypto. We have outlined our crypto roadmap and recently published proposals on stablecoins as well as other aspects of the regime.The FCA’s ban on retail access to cryptoasset derivatives will remain in place. The FCA will continue to monitor market developments and consider its approach to high-risk investments.Notes to editorsIn January 2021, the FCA banned the sale, marketing and distribution of derivatives and ETNs that reference unregulated transferable cryptoassets to retail clients.In March 2024, the FCA announced we would not object to requests from recognised investment exchanges (such as Cboe or the London Stock Exchange) to create a UK listed market segment for cryptoasset-backed exchange traded notes (cETNs) for professional investors. In June 2025, the FCA launched a consultation on proposals to lift the ban on retail access to cETNs.The FCA grants recognition orders to investment exchanges in the UK to make sure they meet regulatory standards. This power is provided under the Financial Services and Markets Act 2000 for the FCA to consider applications from UK entities (a body corporate or an unincorporated association) for recognition as a UK recognised body. Examples of recognition requirements include equivalent protection for investors. The change will come into force on 8 October 2025.Read Handbook Notice 132 (PDF). Press Releases Friday, August 1, 2025 - 12:24 FCA 152936 https://www.fca.org.uk/news/press-releases/fca-fines-sigma-broking-limited-transaction-reporting-failures Sigma Broking Limited (Sigma) has been fined £1,087,300 for failing to submit complete and accurate transaction reports for 5 years. The FCA’s monitoring systems identified issues with the transaction reports submitted by Sigma, which were raised with the firm in May 2023.In January 2024, Sigma told the FCA that around 984,000 incorrect reports had been submitted. Following an independent review, Sigma confirmed in February 2025 that the total number of incorrect reports was 924,584, close to 100% of transactions handled by the firm between 1 December 2018 and 1 December 2023.These failures were caused by incorrect system setup and persisted uncorrected due to weaknesses in their reporting processes.Steve Smart, joint executive director of enforcement and market oversight, said: 'The transaction reports we receive are crucial to the work we do in combatting financial crime. Sigma’s failures were serious, sustained and showed a lack of care.'We will take action whenever we identify such failures.'This is the second enforcement action against Sigma for inadequate transaction reports, which affects the FCA’s ability to detect and investigate market abuse effectively.In October 2022, the FCA fined Sigma £531,600 for failing to report on 56,000 transactions and identify 97 suspicious trades between December 2014 and August 2016. The regulator also took action against 3 directors with fines totalling over £200,000, 2 of whom were banned.This case took 16 months from opening in April 2024 to achieving a public outcome - compared to an average of 42 months for cases closed in 2023/24. The FCA continues to improve the pace of its enforcement investigations.Notes to editorsFinal Notice: Sigma Broking Limited (PDF).Sigma agreed to resolve the case at an early stage and qualified for a 30% discount on the penalty imposed. Without this discount, the fine would have been £1,553,300.This is the second enforcement action against a firm for a breach of transaction reporting requirements in the UK Markets in Financial Instruments Regulation (MiFIR) legislation, the first action having been published against Infinox Capital Limited 6 months ago.Sigma breached Article 26 of MiFIR and Principle 3 of the FCA's Principles for Businesses.Article 26 of MiFIR means the obligation to report transactions.Principle 3 of the FCA's Principles for Businesses requires firms to take reasonable care to control their affairs responsibly and effectively.Transaction reports are submitted to the FCA when a transaction is executed in a financial instrument. Transaction reports include, but are not limited to, information on the financial instrument traded, the price and the participants involved. Read more information about transaction reporting.The FCA uses the information from transaction reports for:monitoring market abusefirm supervisionmarket supervisionsharing with certain external parties, such as the Bank of England Press Releases Friday, August 1, 2025 - 10:02 FCA 152926 https://www.fca.org.uk/news/blogs/ai-live-testing-use-ai-uk-financial-markets-promise-practice Artificial Intelligence (AI) is reshaping industries, including financial services. It has the potential to transform decision-making and customer experiences in UK financial services for the better. But it also raises concerns about how it can be used safely and responsibly. This can slow the pace of innovation if left unanswered as well as introduce new risks.That's why we’re proposing AI Live Testing – a practical, collaborative way for firms and the FCA to explore methods to assure AI systems together. Here, we set out why you should apply to take part. The promise of AI Using AI can result in: Smarter decision-making: Models can process huge volumes of data to assess risk, automate compliance, and tailor financial products.Stronger protections: Machine learning systems are spotting anomalies and stopping fraud before it affects consumers. Better experiences: Natural language models and predictive analytics can personalise financial products to better meet consumer needs. But this innovation depends on more than just computing power and data. Crucially, it also depends on confidence that AI can be used safely and responsibly in UK financial markets. Otherwise, innovation will stall. We want the UK to be a place where beneficial technological innovation can thrive to support growth and competitiveness. The question then becomes: how can we build confidence in AI so that consumers and markets benefit? The regulatory challenge: clarity without closureYet, this is where financial services regulators face a tricky balance. On the one hand, at the FCA we recognise that firms need regulatory clarity on AI – a predictable framework to guide their investments, operations, and risk management.On the other hand, we also recognise that if we, as the UK's financial services regulator, move too quickly or narrowly, we could unintentionally stifle innovation. Also, any regulatory action could potentially become out-dated very quickly as the technology evolves at pace. A collaborative path forward: AI Live TestingAI Live Testing is a practical, hands-on way to build trust, reduce risk, and accelerate safe and responsible innovation. This isn’t a compliance exercise. It’s a partnership. It provides a structured but flexible space where firms can test AI-driven services in real-world conditions, with appropriate regulatory support and oversight (see the Terms of Reference (PDF)). It will help firms who are further along in AI development and are ready to use in markets. This will allow both sides to:Understand how an AI system performs in live market contexts – in practice and not just in theory.Identify potential risks early and adapt controls accordingly.Explore potential assurance methods that are grounded in how AI is used in a specific market context; not just what’s ideal on paper.Share insights that feed into smarter, more future-proof AI approaches.AI Live Testing complements the FCA's Supercharged Sandbox, which is focused on firms who are in the discovery and experiment phase of their AI product's development. This joined-up approach mirrors the spirit of innovation itself: test, learn, iterate, improve. It's a core part of the FCA's AI innovation offering through the AI Lab and set out in our Engagement Paper on AI Live Testing.Why you should take partWe know that complex questions around how AI systems will perform in the real world can significantly slow the pace of innovation. That's why we want to help firms by providing a place where they can test. AI Live Testing can offer you:Clarity on expectations: Get early, practical feedback on what regulators are looking for when it comes to, for example, considerations around explainability, fairness, performance, and controls. Less guesswork. Confidence in deployment: Test how your AI system behaves under real operating conditions to ensure it works in a safe and responsible way. A chance to shape best practice: Your experience in AI Live Testing helps inform insights and best practice for the rest of industry. You can help make sure that regulatory approaches are grounded in operational reality and make a genuine difference for the better for consumers and markets.What AI Live Testing isn't FCA AI Live Testing is not designed to become a tool to approve or certify that an AI model is OK to use. We don’t believe this is within the FCA's remit. It also isn't an enforcement or supervisory function – it's entirely voluntary.From model evaluation to AI system evaluation Much of the broader AI assurance debate has focused on how AI models operate. But when it comes to AI deployment, the model is just one part of a broader AI system. This is particularly true for financial services, where we need to understand how AI systems behave in real-world market situations. We define an AI system as an ecosystem of people, processes and technologies designed to deliver intended outcomes. It includes the model, data pipeline, human oversight, testing and governance. Considering the AI system as a whole is key to reducing bias, improving accuracy, and increasing transparency.And yet, our work to date suggests that some of the most important questions are more fundamental and even come before considering issues such as bias or accuracy. They are: What is the intended goal and outcome for the AI system – at a point in time and over time?What are the key risks relative to use case context, as well as considerations around regulatory compliance?How can these risks be best mitigated and what residual risks are acceptable? Do we have a shared framework to assess these risks? These are not academic questions. They’re about ensuring that the AI system is tested for its real-world impact – including its impact on consumers and markets (see ‘AI for growth – how the FCA can help’). These are live issues that respondents to our Engagement Paper on AI Live Testing are considering. We will be sharing more details when we publish the Feedback Statement in September 2025. AI Live Testing is a bridge between beneficial innovation and assurance. It gives you a structured way to take bold steps forward, with the reassurance that you're building on solid ground.We’re inviting financial firms of all sizes to take part. If you’re building something ambitious and want to get it right, this is your chance to test, learn, and lead.Join us in shaping the safe and responsible future of AI in UK financial markets. Blogs Friday, August 1, 2025 - 08:13 FCA 152831 https://www.fca.org.uk/news/press-releases/fca-seeks-improvement-digital-loan-processes The FCA found that the design of some digital loan processes lacks positive friction and excludes information consumers need, for example, on cost. Lenders' online and in-app application processes can help prospective borrowers understand what they’re signing up for, a review by the FCA has found. However, improvements could be made to these digital processes, so consumers are able to make informed decisions about their finances.The FCA's review is part of its strategic focus on helping consumers navigate their financial lives. It has shared examples of good and poor practice with lenders to help them better support their customers.The regulator found some lenders were using shorter, simplified language and providing explainer videos that helped customer understanding.However, the design of some digital loan processes lacked 'positive friction', which slows decision-making, and excluded information consumers needed, for example, on costs.Alison Walters, director of consumer finance at the FCA, said:'Online and app-based applications can make it easier for people to get the credit they need to navigate their financial lives. But poorly designed applications could mean people bypass important information. We're sharing examples of what works and what doesn't, so lenders can better support their customers.'Notes to editorsDigital design in customers' online journeys: good practice and areas for improvementResearch Note: Consumer impact of sludge, deceptive design, timeliness and simplification.Positive frictions are sections of a consumer journey that can encourage consumers to pause and reflect, which can lead to better consumer outcomes. For example, FCA research (PDF) has tested positive frictions in the form of check boxes, time delays and requirements for evidence declaration in the context of high-risk investing.The findings of this review relate to consumer credit providers only, but there is good and poor practice that might be of interest more broadly to those firms with a digital presence.We've made various changes in the consumer credit sector in recent years.In 2022, the FCA published research into how trading apps were allowing sludge and gamification practices.The FCA's Financial Lives 2024 survey found that digital exclusion in the UK has significantly declined in recent years. In May 2024, only 2% of adults (1.2 million) were digitally excluded, a dramatic improvement from 14% (6.9 million) in 2017. Digital exclusion includes those who never or rarely use the internet, are unsure that they use it, or have poor digital skills. Press Releases Thursday, July 31, 2025 - 08:02 FCA 152841