FCA extends time for financed houses to handle non discretionary finance complaints

FCA proposes to extend the time firms have to handle complaints relating to motor finance commission

The proposed extension would allow firms more time to handle complaints efficiently and effectively and help prevent disorderly, inconsistent and inefficient outcomes for consumers and firms.

The FCA is seeking feedback on proposals to extend the time firms have to respond to motor finance complaints where a non-discretionary commission arrangement was involved.

The regulator previously extended the time firms have to respond to motor finance complaints involving a discretionary commission arrangement (DCA).

The FCA’s consultation follows the Court of Appeal’s 25 October judgment in Hopcraft v Close Brothers Ltd, Johnson v FirstRand Bank Ltd, and Wrench v FirstRand Bank Ltd.

In these cases, the Court decided it was unlawful for the car dealers to receive a commission from lenders providing motor finance without first telling the customer about the commission and getting their informed consent to the payment.

To obtain informed consent, the borrowers would have to have been told all material facts that might have affected their decision to enter into the agreements, which, in these cases, included how much the commission would be and how it was to be calculated. The judgment related to fixed commission motor finance agreements as well as DCAs, which the FCA banned in 2021. The 2 lenders involved in the cases intend to appeal.