Car loans complaints extension announced by the Financial Conduct Authority

The Financial Conduct Authority (FCA) has announced an extension for firms to respond to complaints about motor finance agreements that do not involve discretionary commission arrangements (DCAs).

Firms now have until after December 4, 2025, to provide final responses to these complaints, aligning with a similar extension already in place for DCA-related complaints.

The decision follows the Court of Appeal’s ruling on October 25, 2024, in three motor finance cases, which deemed it unlawful for car dealers to receive commissions from lenders without first disclosing the arrangement to customers and obtaining their informed consent. The ruling focused on common law, equitable principles, and the Consumer Credit Act, rather than FCA regulations.

Given the potential surge in complaints related to the judgment, the FCA has extended the response time to ensure that consumer outcomes remain orderly, consistent, and efficient while easing the administrative burden on firms.

The Supreme Court has since confirmed it will hear an appeal against the Court of Appeal’s decision, with the FCA actively seeking to intervene in the case. On December 11, 2024, the FCA urged the Court to expedite both the appeal decision and the substantive judgment.

While awaiting the Supreme Court’s ruling, firms must continue to comply with the current legal framework when arranging new motor finance agreements. To aid compliance, the FCA has provided a detailed summary of the Court of Appeal’s decision, including expectations and examples of good and poor practices.

The FCA’s proactive measures aim to support both consumers and firms during this complex legal and regulatory period, ensuring clarity and adherence to the evolving legal landscape.

Stephen Haddrill, director general of the Finance & Leasing Association, said: “We welcome the extension of the pause to non-DCA complaints as we await the outcome of the Supreme Court hearing.”