The U.K. Financial Conduct Authority has published a consultation on further temporary changes to handling rules for motor finance complaints. The FCA explains that following the Court of Appeal's recent judgment on motor finance commission, it is proposing new complaint handling rules. It is likely that the judgment will result in an increase in motor finance non-discretionary-commission-arrangement (non-DCA) commission complaints. This will create additional pressures on firms and the Financial Ombudsman Service. The FCA therefore considers that there is a strong case for introducing complaint handling rules that give firms extra time to deal with motor finance non-DCA commission complaints not currently covered by the DCA complaint handling rules. Extending the time firms have to deal with these complaints will also allow time to see the outcome of any appeals for permission to appeal the Court of Appeal's judgment to the Supreme Court.
The proposed rules for motor finance non-DCA commission complaints mirror, as far as possible, the DCA complaint handling rules. The main changes the FCA proposes are: (i) the requirement to provide a final response to such complaints and give complainants the right to go to the FOS within eight weeks would be suspended until either May 31, 2025, or December 4, 2025; (ii) consumers who receive a final response to such complaints will have until the later of 15 months from when the final response is sent or July 29, 2026, to decide whether to refer their complaint to the FOS; and (iii) firms will have to maintain and preserve relevant records. The FCA proposes two dates for how long it should provide the temporary extension: (a) December 4, 2025—to align with the DCA complaint handling rules. This option would include the same commitment to bring this date forward if the FCA does not need all this time to ensure an orderly, consistent, and efficient resolution to affected complaints; and (b) May 31, 2025—this reflects the FCA's current best estimate for how long it could take to find out if the Supreme Court has granted permission to any application to appeal the Court of Appeal's judgment and, if necessary, respond by putting further measures in place. The DCA complaint handling rules will not be affected by these proposals. The deadline for comments is December 5, 2024. The FCA intends to publish its final policy by December 19, 2024.
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