FCA Statements on Vehicle Finance Mis-selling

Extension to motor finance complaint handling pause confirmed | FCA

24/09/2024
The Financial Conduct Authority (FCA) had temporarily paused the usual 8-week timeline for handling complaints about Discretionary Commission Arrangements (DCAs) in car finance until after September 25, 2024. They need to extend the temporary complaint handling rules for complaints in the motor finance industry due to delays in data collection, ongoing litigation, and to allow for the outcome of the Barclays judicial review, with next steps expected in May 2025.

This extension means pausing complaint handling until 4 December 2025 and giving complainants until at least 29 July 2026 to refer their complaints to the Financial Ombudsman. You can still submit a claim; however, they will be held until a decision is made on how car lenders will address these claims. This pause ensures that customers affected receive fair outcomes from their car lenders. For you, this means your car lender can thoroughly investigate your claim to ensure any owed compensation is handled fairly. The FCA will provide updates as the situation develops, and your claim can be placed in the queue for review in the meantime.

Statement on motor finance review next steps | FCA

11/03/2025
The UK Financial Conduct Authority (FCA) has published a statement informing firms, consumers and stakeholders of next steps in its review of the past use of motor finance discretionary commission arrangements.

The Court of Appeal handed down its judgement in three related motor finance appeals on 25 October 2024, finding that there was a fiduciary relationship between the dealer and the consumer, raising the prospect of widespread liability among motor finance firms that failed properly to disclose commissions to customers. The Supreme Court will hear an appeal against the Court of Appeal’s judgement on 1 to 3 April. The FCA’s statement confirms that, if it concludes that motor finance customers have lost out (taking into account the Supreme Court’s decision), it is likely to consult on an industry-wide redress scheme.

Firms would be responsible for determining whether customers had lost out due to their failings, but the FCA would set rules that firms must follow under the scheme and introduce checks to ensure they do.

The FCA will confirm within six weeks of the Supreme Court’s decision whether it is proposing a redress scheme and, if so, how that would be taken forward. It may also consult separately on changes to its rules, depending on the Supreme Court’s decision.