The Financial Conduct Authority (FCA) is currently reviewing whether motor finance customers have been overcharged because of the past use of discretionary commission arrangements (DCAs).
Today, the FCA announced it is proposing to extend the current pause to the time firms have to issue final responses for motor finance complaints involving a DCA.
It now intends to set out next steps in its review into the past use of DCAs in May 2025. By then, the FCA expects to have analysed the data it has collected from firms and assessed the outcome of the Barclays judicial review of the Financial Ombudsman’s decision to uphold a DCA complaint.
The next steps could involve consulting on a redress scheme. This is why the FCA intends to take the precautionary step of pausing complaint handling until 4 December 2025, as it may take until then to implement it.
Or it could involve asking firms to start dealing with complaints again as usual, in which case the FCA would consult on ending the pause earlier.
It is too early to say whether any redress intervention will be necessary, but based on the FCA’s work so far, it is more likely than when it started the review.
More information on the proposed extension to the complaint handling pause: Update on motor finance work | FCA and updated Information for firms on motor finance complaints | FCA.
See the FCA’s consultation on the temporary changes to handling rules, which closes on 28 August.
Also see the BVRLA’s latest Consumer Duty guidance: BVRLA Checklist: Preparing for the Consumer Duty Board Report.
