The head of the UK’s financial watchdog has rebuked criticism that the wide scope of the motor finance redress scheme was “impractical”.

Nikhil Rathi, chief executive of the Financial Conduct Authority said: “We know it is difficult. But you can’t say the law has been broken and it is too difficult to even try to put things right.”

He added the redress scheme covering agreements going back to 2007 – in line with complaints that the Financial Ombudsman Service (FOS) can consider – was not “completely impractical,” referencing criticism from trade associations.

Stephen Haddrill, director general of the Finance & Leasing Association, had branded the time frame a “major concern”.

“I just think that is completely impractical. It is not just firms that don’t have the details about contracts back then, customers don’t either,” Haddrill told the BBC.

Complaints to the FOS soared to their highest since the PPI scandal for the year ending March 31 2025, after motor finance grievances made a near-500 per cent jump to 73,328.

But following the Supreme Court handing lenders a partial win as they sought to overturn the Court of Appeal’s ruling that it was unlawful for banks to pay a commission to a car dealer without the customer’s informed consent, Rathi has urged banks to co-operate.

The head of the City regulator told the Financial Times: “Now is not the time to haggle with us but to help put things right for consumers”.