The Financial Conduct Authority (FCA) has given finance houses until December 2025 to respond to motor finance commission complaints
It said the extension will help prevent “disorderly, inconsistent and inefficient” outcomes for consumers and firms.
“We have extended the time firms have to respond to complaints about motor finance agreements not involving a discretionary commission arrangement (DCA).
“Firms now have until after 4 December 2025 to provide a final response to non-DCAs, in line with the extension we have already provided for complaints involving DCAs,” it said in a statement today.
The extension follows the judgment of the Court of Appeal on 25 October 2024 in three motor finance cases.
In that case, the Court decided it was unlawful for the car dealers to receive a commission from lenders providing motor finance without first telling the customer about the commission and getting their informed consent to the payment.
The focus of the Court of Appeal decision was common law, equitable principles and the Consumer Credit Act, rather than FCA rules.
Finance houses are already braced for a deluge of complaints on motor finance as a result of the ruling.
“Firms who provide motor finance are likely to receive a high volume of complaints in response to the judgment. We have extended the time firms have to handle complaints to help prevent disorderly, inconsistent and inefficient outcomes for consumers and firms,” said the FCA.
On 11 December 2024, the Supreme Court confirmed it would hear an appeal against the Court of Appeal’s judgment.
“We previously wrote to the Court asking it to decide quickly whether it will give permission to appeal and, if it does, to determine the substantive appeal as soon as possible. We plan to apply to formally intervene in the case to share our expertise to assist the Court.
“While the Supreme Court will hear an appeal, firms must still comply with the law as it stands when arranging new motor finance agreements. To assist firms, we have set out a summary of the Court of Appeal decision, our expectations and some good and poor practice examples.
The Finance & Leasing Association, which represents banks and finance houses, welcomed the extension.
Stephen Haddrill, director general of the FLA said: “We welcome the extension of the pause to non-DCA complaints as we await the outcome of the Supreme Court hearing.”
