Credit, Collections & Insolvency News
The Financial Conduct Authority (FCA) has announced that it has 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-DCA complaints, in line with the extension already provided for complaints involving DCAs.
The extension follows the judgment of the Court of Appeal on 25 October 2024 in 3 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.
Firms who provide motor finance are likely to receive a high volume of complaints in response to the judgment.
On 11 December 2024, the Supreme Court confirmed it would hear an appeal against the Court of Appeal’s judgment. The FCA 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. The FCA says that it plans 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, the FCA has set out a summary of the Court of Appeal decision, our expectations and some good and poor practice examples.
Consumers will have until the later of 29 July 2026 or 15 months from the date of their final response letter from the firm, to refer a non-DCA complaint to the Financial Ombudsman (instead of the usual 6 months).
Commenting on the announcement, Stephen Haddrill, Director General of the Finance & Leasing Association (FLA) said “We welcome the extension of the pause to non-DCA complaints as we await the outcome of the Supreme Court hearing.”