Santander criticises regulator as it increases redress provision to £461 million

Banking giant Santander has criticised the Financial Conduct Authority’s (FCA) motor finance redress proposals while announcing a significant addition to its compensation provision.

The bank, which reportedly said that it had considered pulling out of the UK entirely in early 2025 due, at least in part, to motor finance-related fallout, initially announced a redress provision of £295 million in November 2024 and has now increased that sum to £461 million. Santander announced the new provision in its full-year results, having previously not reported its third-quarter performance due to what it called ‘uncertainty’ after the FCA launched its motor finance redress scheme consultation.

City AM reported that Mike Regnier, Santander UK's CEO, also claimed that the redress scheme, in its proposed form, could cause 'significant' harm to consumers, jobs, and the broader economy.

Such warnings have become a familiar refrain from lenders, with Lloyds Banking Group suggesting in October 2025 that it would ‘fight’ the regulator’s redress proposals and claiming that the FCA had gone beyond the Supreme Court judgment in Johnson, Wrench and Hopcraft, handed down on 1 August 2025. Lloyds Banking Group CEO Charlie Nunn further claimed in November 2025 that car finance claims were ‘damaging Britain' and could deter overseas investment from being deployed in the country.

Nunn has been a prominent figure through the regulator’s investigation and press coverage as the scale of alleged mis-selling has become clearer, going so far as to state that Lloyds Banking Group had no ‘evidence of harm, or that we’ve broken regulation’ during an appearance before Parliament’s Treasury Select Committee in May 2025.

Regnier himself has also previously made similar comments. In October 2025, calling on the government to intervene in the redress scheme, Reginer said: ‘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.’

We have previously challenged these assertions and explained how the real economic damage was caused by the extraction of billions of pounds from household budgets over many years through hidden commissions. Returning these funds to consumers is likely to provide a stimulus to the economy rather than damaging it.

Which other lenders have made redress provisions?

In early January 2026, The Times revealed that Mercedes-Benz Financial Services UK had made an additional provision, taking its total to £424 million.

Other lenders who have made significant provisions include Lloyds Banking Group, which has set aside almost £2 billion, Bank of Ireland UK (Northridge Finance), which has set aside £350 million, and Barclays, which ceased offering new motor finance agreements in late 2019 but anticipates redress payments of £325 million for historical mis-selling.

What have other commentators said about the FCA’s redress proposals?

MPs and advocacy groups have also been critical of the regulator's plans, albeit for very different reasons than the lenders.

In its Car Finance Scandal: Assessing Redress report, published on 3 November 2025, the All-Party Parliamentary Group on Fair Banking accused the FCA of ‘nakedly taking the side of lenders’ and of being taken in by lenders’ ‘doom-mongering’ around the potential economic consequences of a redress scheme.

Consumer Voice was more nuanced in its criticism, using its Consultation response report, published on 12 December 2025, the day the redress consultation closed, to highlight several concerns about the proposals and to call on the regulator to take action.

When will the FCA publish its final redress rules?

The regulator says it will publish its final rules by the end of March 2026.

When will car finance compensation payments begin?

We anticipate redress payments will commence in mid-2026.

Do I need to use a solicitor to bring a car finance claim?

No, the regulator’s redress proposals mean you can claim car finance compensation yourself at no cost. However, in addition to ensuring that your claim is professionally managed, instructing a solicitor may also lead to the identification of additional claims that fall outside the scope of the redress scheme, such as irresponsible lending and the mis-selling of GAP insurance and other add-ons, which we cover in this guide.

How can I register my car finance claim with Harcus Parker?

You can register your claim with us here.