FCA extends deadline for firms to respond to motor finance complaints

The Financial Conduct Authority (FCA) extended the deadline for firms to respond to complaints, it announced on Thursday, related to motor finance agreements without discretionary commission arrangements (DCAs), until 4 December 2025.

It said the extension aligned with an earlier decision to delay responses for complaints involving DCAs, ensuring consistent handling of consumer issues.

This decision followed an October Court of Appeal judgment, which found it unlawful for car dealers to accept commissions from motor finance lenders without disclosing the arrangement and obtaining informed consent.

While the ruling centered on common law and the Consumer Credit Act rather than FCA rules, it had prompted a surge in consumer complaints, leading to concerns about potential disorderly and inconsistent outcomes if firms were forced to respond immediately.

On 11 December, the Supreme Court agreed to hear an appeal of the Court of Appeal’s decision.

While the appeal was pending, firms were required to comply with the current legal framework when arranging new motor finance agreements.

To support compliance, the FCA said it had issued a summary of the ruling along with examples of good and poor practices.

Consumers concerned about undisclosed commissions and overpayment on motor finance or leasing agreements were meanwhile encouraged to file complaints.

The FCA extended the timeframe for referring such complaints to the Financial Ombudsman, allowing 15 months from the date of the firm's final response or until 29 July 2026, whichever was later.

At the same time, the FCA said it was conducting a review of historical DCA-related misconduct in motor finance agreements, seeking to determine whether consumers have been harmed and how best to ensure fair compensation.

That review, launched in January, had faced delays due to data collection challenges and ongoing legal proceedings.

A progress update, including potential resolutions for both DCA and non-DCA complaints, was expected in May 2025.

Reporting by Josh White for Sharecast.com.