As we previously reported, the Financial Conduct Authority (FCA) had been due to give an update on their ongoing motor finance review by 24 September 2024. The review into discretionary commission agreements in the motor finance market began in January, and since then the usual eight-week complaints handling deadline had been suspended.
On Tuesday 30 July, the FCA published a progress update which pushed this September timeframe back until May 2025. While affected firms are said to have been cooperative with their regulator, it has taken longer than envisaged for them to supply the FCA with the information necessary to finalise the next stages of the review. Recognising that they may need to consult further with the market, the FCA has tentatively extended the pause in the complaint handling rules until 4 December 2025. Likewise, instead of the usual six months, consumers will now be given until 29 July 2026 or 15 months from the date of their final response letter from firms within which to refer their complaint to the FOS, whichever date is the later.
In addition to the delay in receiving information from affected firms, the FCA Chief Executive, Nikhil Rathi, pointed to unresolved questions of law which warrant further consideration. In a podcast published on the same day, he pointed to the Barclays judicial review issued in respect of a FOS decision against it, as well as the consolidated Court of Appeal case involving Close Brothers and Firstrand/Motonovo that was heard in early July. Judgment has not yet been handed down in the appeal, and the Barclays judicial review is not expected to be heard before the autumn.
As to redress, having hinted in March that it was “improbable” that the FCA would find nothing, Rathi said in Tuesday’s podcast that it is more likely now than when the review started that a structured redress mechanism will need to be rolled out in the future.
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