Welcome to the August 2026 Edition of our Consumer Finance & Insurance Newsletter.
I think its fair to say that the theme of August outside of regulation has been “when will it next Rain?” Is this the hottest summer on record? Aside from the glorious, yet arid weather it is also fair to say that August as in most years shows a slowing in regulatory developments.
That said, there are some key topics to sit highly on the radar. The motor finance redress challenges continue; however a clear deadline is in line place to be met by the end of August.
Away form Motor finance the key regulatory topics remain to be Consumer Duty & Financial Crime Controls as high on the agenda. There have also been a few enforcement cases against Senior Managers with 3 managers being banned by the FCA of holding future Senior Manager functions.
In this edition, we explore the key regulatory developments and supervisory themes affecting Consumer Credit, Insurance Intermediary and Claims Management firms across the UK in August, as well as stories that affect all sectors.
If you would like to discuss how these developments may impact your business or regulatory strategy for the year ahead, our team would be pleased to support you.
Use the yellow dropdown arrow to expand and view more information for the section you’re interested in.
GENERAL UPDATES.
My FCA
It’s been a year since the FCA launched My FCA and by the end of March, every authorised and regulated firm was using it to report data and pay fees.
Instead of logging in to 3 different systems, firms now use 1 platform, making it easier to meet regulatory obligations.
Longer REGDATA Operating Hours
REGDATA is currently available from Monday to Friday: 7am to 10pm and Weekends and bank holidays: 8am to 5pm.
From 17 September 2026, RegData will operate every day from 7am until midnight, including weekends and bank holidays.
CONSUMER CREDIT.
Motor Finance Redress Scheme Legal Challenge update & Feedback on Implemntation Plans
As stated last month, the FCA have received legal challenges to their motor finance compensation scheme. The FCA have stated their priorities remain to secure fair compensation for consumers as quickly as possible and ensure a healthy motor finance market. The FCA welcome the commitment of most lenders to implement the scheme and will defend it robustly. This legal action continues.
Regardless of the ongoing challenges, motor finance lender affected by the scheme must by the 31st August have completed their implementation and readiness checks for agreements prior 1st April 2014. This includes identifying potentially in-scope agreements, build and test customer identification and remediation processes, established redress calculation methodologies, governance arrangements in place. And staff in place ready to operationalise the scheme.
On the 19th August, the FCA published feedback on the plans they had collected from lendersfollowing the scheme announcement. The full feedback can be found here together with examples of good and poor practices.
Full details of the scheme requirements can be found in PS26/3 Motor Finance Consumer Redress Scheme.
Motor Finance Provider Enters Administration
On 30th July, a motor finance firm entered administration. Blue Motor Finance Limited entered into administration which is likely to affect consumer outcomes and amount of redress they are able to pay under the scheme.
The FCA continue to engage with Blue Motor’s administrators and other providers requesting further evidence of their ability to meet their capital adequacy and liquidity resources as the redress scheme progresses. If firms have not already modelled their liabilities under the scheme, they should be doing this as a matter of urgency. Further information regarding the administration can be found here.
MORTGAGES.
No major updates
There are currently no new updates from the FCA in this sector. Continued focus of firms should relate to the ongoing consultation for simplifying mortgage rules and consumer duty outcomes.
INSURANCE.
CP26/22: Simplifying the Insurance Rules Consultation extended
One of the most significant ongoing insurance-specific developments is the FCA's consultation on simplifying insurance rules. The consultation was active during August and received an update on 18 August 2026 which has extended the consultation period until the 19th September.
Key proposals include:
- Narrowing the application of insurance conduct rules for non-UK business.
- Removing disclosure requirements considered duplicative or low value.
- Allowing greater flexibility in digital disclosures.
- Simplifying advised insurance sales requirements.
- Converting minimum Professional Indemnity Insurance (PII) limits for intermediaries from euros to pounds sterling.
For intermediaries, these changes could reduce compliance complexity while maintaining consumer protections. Firms are encouraged to provide feedback up to the 19th September.
More information can be found here.
CLAIMS MANAGEMENT.
Continued focus on Market Study, Motor Finance Redress Scheme and Consumer Duty
There are currently no new updates from the FCA in this sector. Continued focus of firms should relate to the ongoing Market Study, Motor Finance Redress scheme and Consumer Duty outcomes.
The market study will gather evidence to understand the root causes of practices that have been observed by firms in the claims management market and how they impact competition and consumer outcomes.
This includes practices that have been observed by FCA-regulated claims management companies (CMCs) and lead generators, as well as legal professionals regulated by the Solicitors Regulation Authority (SRA) and other legal regulators. The FCA will be working closely with the SRA as it carries out the market study.
The study will inform whether interventions are needed to promote effective competition, support customer choice, and ensure the claims management services market serves consumers in the way that is expected. The work will focus on claims management services provided in relation to financial services and financial products claims and housing disrepair claims.
OTHER STORIES, FOR INFORMATION.
FOS publish Policy Statement in response to FCA consultation on CP26/9 - on mondernising the Redress System
The Financial Ombudsman Service (FOS) is changing how it handles complaints to make the system faster, more efficient and more predictable, while trying to preserve access to redress—particularly for vulnerable or unrepresented consumers.
In summary, There are 3 main changes which will take effect from the 1st October 2026:
- A new stage in the process called “Ready to Investigate”. This stage is designed to allow investigators to gather information quicker to ensure an efficient decisioning process.
- Expanded Powers to Dismiss Complaints - FOS is strengthening its ability to dismiss cases where investigating them would be inappropriate, duplicative or unlikely to produce a useful outcome.
- Changes to the “Fair & Reasonable” Test - FOS will amend its rules to clarify that when deciding whether something was fair and reasonable, it should assess the complaint against the standards applicable at the time the firm acted or failed to act. In other words, the assessment shouldn't effectively apply today's regulatory expectations retrospectively to historical conduct.
