On 24 September 2024, the Financial Conduct Authority (FCA) published a Policy Statement, PS24/11, confirming that it is extending its temporary changes to handling rules for motor finance complaints.
Background
The FCA announced in January 2024 that it was reviewing whether motor finance customers have been overcharged due to the past use of discretionary commission arrangements (DCAs). It also paused its 8-week deadline for motor finance firms to provide a final response to relevant customer complaints.
In Consultation Paper CP24/15, published on 30 July 2024, the FCA consulted on a proposal to extend the DCA complaint handling pause, as it had taken longer than expected to get the data it needed from firms and as there was relevant ongoing litigation.
Extension of the complaint handling pause
In PS24/11, the FCA confirms that it is extending the DCA complaint handling pause for the reasons outlined in CP24/15. The FCA says that extending the pause will ensure it can prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while it completes its assessment to decide the best way forward.
The extension means that:
- The complaint handling pause will continue until 4 December 2025.
- Consumers 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 DCA complaint to the Financial Ombudsman Service (FOS), instead of the usual 6 months, so that consumers will not have to decide whether to refer their complaint to the FOS before the FCA announces its next steps.
Next steps
The FCA plans to set out next steps in its review into the past use of DCAs in May 2025.