Since the Financial Conduct Authority (FCA) launched its review into discretionary commission arrangements (DCAs), a ruling by the Court of Appeal found in favour of the consumers in three cases relating to commission disclosure. The Supreme Court will hear an appeal against the Court of Appeal’s judgment in early April. The FCA has been granted permission to intervene in the case and have filed a submission with the Court.
The FCA has confirmed that if, taking into account the Supreme Court’s decision, it concludes motor finance customers have lost out from widespread failings by firms, then it’s likely it will consult on an industry-wide redress scheme. Under a redress scheme, firms would be responsible for determining whether customers have lost out due to the firm’s failings. If they have, firms will need to offer appropriate compensation. The FCA would set rules firms must follow and put checks in place to make sure they do.
The FCA is looking at a redress scheme that is simpler for consumers than bringing a complaint. If fewer consumers rely on a claims management company, they will keep all of any compensation they receive.
The FCA will confirm within six weeks of the Supreme Court’s decision if it is proposing a redress scheme and if so, how this will be progressed.
The Court of Appeal case involved complaints about discretionary and non-discretionary commission arrangements (non-DCAs). The FCA’s next steps on non-DCA complaints will also be informed by the outcome of the Supreme Court case.
The regulator may also consult separately on changes to its rules.
The BVRLA will continue to engage closely with the FCA and stakeholders. Any questions can be emailed to [email protected].
Also see the BVRLA Commission Disclosure resources hub.
