LONDON, March 11 - Britain's Financial Conduct Authority

on Tuesday said it would likely consult on an industry-wide

scheme to compensate motor finance customers if the Supreme

Court rules that lenders and brokers should have been more

transparent about commissions.

The regulator has been weighing potential consumer redress

that analysts say could run into billions of pounds after

London's Court of Appeal ruled in October that it was unlawful

for car dealers to receive commission from banks without a

customer's informed consent.

The Supreme Court will hear an appeal against the Court of

Appeal's judgment from April 1, and the FCA has said it will

confirm within 6 weeks of the Supreme Court's decision if it

will propose a redress scheme and how to "take it forward".

"A redress scheme would be simpler for consumers than

bringing a complaint," the FCA said in a statement, adding that

it wanted to provide as much certainty as possible to firms,

consumers and stakeholders.

"We would expect fewer consumers to rely on a claims

management company, meaning they would keep all of any

compensation they receive."

A number of British banks including Lloyds Banking Group ( LYG )

, Santander UK and Close Brothers

have already set aside cash in advance of a possible

compensation scheme.

Ratings agency Moody's said last November that the total

industry costs for a British investigation into historic motor

finance sales and "hidden" commissions by some banks and

specialist lenders could reach 30 billion pounds ($38.72

billion), while more recent estimates suggest a more modest

financial hit to the sector.

The regulator also said it may consult separately on

changes to its rules, depending on the Supreme Court's decision.

Consultations would likely attract submissions from a range

of respondents spanning banks, brokers and finance providers as

well as consumer interest groups.

($1 = 0.7749 pounds)