The Financial Conduct Authority (FCA) has announced critical updates to its complaint-handling framework for motor finance commission arrangements. In response to legal developments and the escalating volume of complaints, firms have been granted until 4th of December 2025, to finalise responses to certain complaints regarding motor finance agreements. This extension is detailed in Policy Statement PS24/18, issued in December 2024.
The decision follows the Court of Appeal’s landmark ruling on motor finance commission practices, which highlighted deficiencies in consumer protection within these financial agreements. The FCA’s extended timeline applies to complaints involving non-discretionary commission arrangements (non-DCA). This step aims to balance the operational challenges faced by firms with the rights of consumers awaiting redress.
Key Highlights of the FCA’s Extension
- Deadline Adjustment: Firms now have an extended timeframe to issue final responses to motor finance non-DCA complaints, allowing them to prepare adequately for their resolution.
- Extended Referral Rights: Consumers receiving a final response will have until 15 months from the response date—or July 29, 2026, whichever is later—to escalate their complaint to the Financial Ombudsman Service.
- Record-Keeping Mandates: Firms are required to maintain all records relevant to existing and potential complaints, ensuring a robust audit trail for future reviews or claims.
- Broader Complaint Scope: The rules have been expanded to include motor finance consumer hire agreements, addressing potential ambiguities and ensuring consistent consumer protection across motor finance agreements.
Implications of the Supreme Court Appeal
The Supreme Court has granted First Rand Bank and Close Brothers permission to appeal the Court of Appeal’s decision. The FCA believes it is prudent to allow firms to await the outcome of this appeal before resolving certain complaints. This approach seeks to prevent inconsistent complaint outcomes and mitigate unnecessary operational burdens on firms and the Financial Ombudsman Service.
Consumer Protection and Market Integrity
While the extension may delay immediate resolutions for some consumers, the FCA emphasises that it promotes fairness and ensures firms can meet their liabilities without risking insolvency. These measures protect the market’s integrity, ensuring long-term competition and consumer access to credit.
The FCA’s proactive intervention demonstrates its commitment to managing large-scale redress events efficiently. As firms navigate these temporary measures, firms are encouraged to stay informed and monitor ongoing developments.
For further information, visit the FCA’s official publication here.
