ILC ARTICLE

FCA takes immediate motor finance measures


The Financial Conduct Authority is conducting a review of historical motor finance commission arrangements and sales as a result of rising customer complaints.

Some of these complaints were rejected by motor finance companies, only for the Financial Ombudsman Service to subsequently find in favour of complainants.

The FCA said, “If we find there has been widespread misconduct and that consumers have lost out, we will identify how best to make sure people who are owed compensation receive an appropriate settlement in an orderly, consistent and efficient way and, if necessary, resolve any contested legal issues of general importance.

“In the meantime, we are pausing the eight-week deadline for motor finance firms to provide a final response to relevant customer complaints. The pause will apply to complaints about motor finance agreements where there was a discretionary commission arrangement between the lender and the broker and will last for 37 weeks.

“We are introducing the pause without consultation from today to prevent inconsistent and inefficient outcomes for consumers while we assess the issue and determine the best way forward.”

The FCA added that the pause, which applies to complaints received on or after 17 November 2023 and on or before 25 September 2024, may be extended, while customers will also have 15 months to refer complaints to the Financial Ombudsman rather than six months.

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