The Financial Services Authority (FCA) announced on 11 January 2024 that it will use its powers under s166 of the Financial Services and Markets Act 2000 to review historical motor finance commission arrangements and sales across several firms. The Financial Ombudsman Service (FOS) highlighted two cases out of 10,000 complaints, and the FCA has decided to review this matter again as it is concerned about widespread misconduct and that consumers have missed out on compensation.
To provide further information on this matter, the FCA hosted a webinar last week to provide an update as to what should be done during this period when the FCA was conducting its review.
After watching this livestream, my initial thought was it created more questions than answers!
The key points were:
- The FCA is only concerned with discretionary commission arrangements (DCA).
- It has provided a definitive time range for complaints about finance agreements between 6 April 2007 and 28 January 2021.
- Any complaints about non-DCA would need to be investigated as normal.
- The FCA will instigate a consultation on any redress scheme.
- The pause on complaints is until 25 September 2024, and the FCA plans to set out its next steps in Q3 2024.
As anticipated, the FCA was not particularly helpful when questioned about the various issues of investigating complaints that were outside of the standard retention periods for documentation. For example, if a finance agreement was taken out in 2007, the likelihood of the finance company or the credit broker having this documentation would be unusual. The response from the FCA was that all complaints should be investigated fully as per its dispute resolution (DISP) rules.
The FCA has created a new page on its website, Information for firms on motor finance complaints | FCA. This is a useful page, that provides information on dealing with complaints, keeping customers informed, and the FCA’s expectations of firms.
The FCA has also created a page for consumers, Car finance complaints | FCA. You will note on this page that whilst the FCA has informed consumers how to make a complaint, they have not made it clear to whom the consumer should complain. The FCA has advised consumers to make a complaint to the providers (lenders and brokers). This may mean you receive a new influx of complaints and also with the likes of Martin Lewis “jumping on the bandwagon”, it will certainly not help matters!
Therefore, even though the FCA has put a pause on these complaints, we suggest you continue to send all motor finance commission complaints to us, including the non-DCA ones, and we will deal with them for you as necessary.
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