While We Wait: Preparing for the FCA’s Review on Motor Finance Commissions

legal updates

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.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

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:

  1. The FCA is only concerned with discretionary commission arrangements (DCA).
  2. It has provided a definitive time range for complaints about finance agreements between 6 April 2007 and 28 January 2021.
  3. Any complaints about non-DCA would need to be investigated as normal.
  4. The FCA will instigate a consultation on any redress scheme.
  5. 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.

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.

Octane FinanceFuel Your Finance

Octane Finance is the broker of choice for new and used car dealers nationwide. With our uncompromising service levels and our genuine and professional approach, you and your customers can trust us to deliver.

John McDougallLegal AdvisorRead More by this author

Related Legal Updates

More of the same from the FCA

Dealing with discretionary commission arrangements and concern that customers are not getting a fair deal on GAP (Guaranteed Asset Protection) insurance products.

FCA Commission Review: Separating fact from fiction in the wake of scaremongering

Attend a complimentary seminar hosted by the FCA for first-hand information – Scheduled for Wednesday, 24 January 2024.

The FOS reports over 10,000 motor finance complaints: Are we really surprised?

The good news currently is the FCA is focussing its attention on the lender and not our members.

The FCA means business

The FCA are closely monitoring how firms are putting their new rules in place and will take action against those that aren’t following them.

Financial promotion on social media

The FCA’s supervisory approach to financial promotions in social media was issued in 2015.

Another victory, but the problem has still not gone away!

The FOS confirmed in the article they had not yet published any final decisions on commission-related complaints.

Mental Capacity – a person’s ability to make a decision

This is not a “one size fits all”, and you will need practices and procedures in place for such an eventuality.

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.