Proactive Investors - The City watchdog has proposed pushing back the deadline to allow motor finance providers to respond to customer complaints about potential mis-selling.
The Financial Conduct Authority said it plans to consult on putting an extension in place for firms to respond and for consumers to refer complaints to the Financial Ombudsman Service.
It follows last month's Court of Appeal decision that ruled car dealers offering loans to customers for car purchases were liable to potential compensation for mis-selling.
Off the back of that judgment, the FCA said it has since undertaken "extensive industry engagement" alongside the government, has spoken with 63 firms and discussed the implications with consumer representatives.
"Motor finance firms are likely to receive a high volume of complaints in response to the recent Court of Appeal judgment. Any complaint extension would allow them time to consider how these might be efficiently and effectively handled," it said in a statement today.
"This would help prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market."
As the two lenders involved in the legal cases, Close Brothers (F:CBRO) Group PLC (LSE:CBG) and Lloyds Banking Group (LON:LLOY) PLC, intend to appeal, the FCA said it will write to the Supreme Court to request a quick decision over whether it will give permission to appeal.
The proposed complaint extension will cover at least the period until the Supreme Court decides whether to grant permission to appeal, it said.
If permission to appeal is granted, the FCA advised all motor finance firms to use the time to ensure "they have the resources to issue final responses to complaints at the end of a proposed extension", and should consider the size of financial provisions for paying potential redress.