REG - Financial Conduct - FCA next steps on motor finance review
11/03/2025 08:15
For best results when printing this announcement, please click on link below: https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250311:nRSK1622Aa&default-theme=true RNS Number : 1622A Financial Conduct Authority 11 March 2025 STATEMENT ON MOTOR FINANCE REVIEW NEXT STEPS If motor finance customers have lost out from widespread failings, we are likely to consult on a redress scheme We are currently reviewing the past use of motor finance discretionary commission arrangements (DCAs). We're seeking to understand if firms failed to comply with requirements relating to DCAs and if consumers lost out as a result. If they have, we want to make sure consumers are appropriately compensated in an orderly, consistent and efficient way. Since we launched our review, a ruling by the Court of Appeal has raised the possibility of widespread liability among motor finance firms wherever commissions were not properly disclosed to customers. The Supreme Court will hear an appeal against the Court of Appeal's judgment on 1 to 3 April. We have been granted permission to intervene in the case and have filed our submission with the Court. We want to provide as much certainty as possible to firms, consumers and stakeholders. So, we are confirming that if, taking into account the Supreme Court's decision, we conclude motor finance customers have lost out from widespread failings by firms, then it's likely we will consult on an industry-wide redress scheme. We previously said it is more likely than when we started our review that we will introduce an alternative way of dealing with complaints. Under a redress scheme, firms would be responsible for determining whether customers have lost out due to the firm's failings. If they have, firms would need to offer appropriate compensation. We would set rules firms must follow and put checks in place to make sure they do. A redress scheme would be simpler for consumers than bringing a complaint. We would expect fewer consumers to rely on a claims management company, meaning they would keep all of any compensation they receive. It would also be more orderly and efficient for firms than a complaint led approach, contributing to a well-functioning market in the future. Next steps We are no longer planning a further announcement in May. Instead, we will confirm within 6 weeks of the Supreme Court's decision if we are proposing a redress scheme and if so, how we will take it forward. The Court of Appeal case involved complaints about discretionary and non-discretionary commission arrangements (non-DCAs). Our next steps on non-DCA complaints will also be informed by the outcome of the Supreme Court case. Depending on the Supreme Court's decision, we may also consult separately on changes to our rules. Throughout our work, we will continue to consider how to make sure affected consumers are appropriately compensated and the motor finance market continues to work well, with effective competition, for the millions of consumers who rely on it every year. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com (mailto:rns@lseg.com) or visit www.rns.com (http://www.rns.com/) . RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy) . END IRSQFLBFEXLEBBB