Motor Vehicle Finance Claims: Update on FCA Car Finance Investigation

On January 11, 2024, the Financial Conduct Authority (FCA) announced a review into whether motor finance customers have been overcharged on their agreements due to discretionary commission arrangements (DCAs).

The investigation stemmed from growing concerns that motor finance companies have been unjustly rejecting mis-selling claims against lenders. Individuals with motor finance agreements in recent years may have incurred higher costs due to undisclosed commissions charged by their lender or dealer.

When announcing that they were looking into motor finance agreements, the FCA also paused the eight-week limit within which motor finance firms were required to respond to complaints. The expected resolution was originally set for September 26, 2024.

On July 30, 2024, the FCA released a further statement, extending the deadline for motor finance firms to respond to complaints and the outcome of the investigation. The FCA gave two main reasons for the extension. These are that:

Motor finance firms involved in the review have engaged constructively with the FCA but have struggled to provide the necessary data in the requested time. Reasons for this include firms not storing older data and data being stored on multiple systems or spread between lenders and brokers.
Barclays Partner Finance has initiated judicial review proceedings against the Financial Ombudsman Service’s decision to uphold a complaint related to its use of a DCA. The FCA stated that the outcome of this case, expected in the autumn, could be highly relevant to their investigation.

As a result, the FCA has proposed extending the resolution deadline from September to the end of May 2025.

Firms have also been given until at least December 4, 2025 to provide a final response to complaints. The FCA believes that this allows enough time to to confirm how firms will start providing redress to customers if deemed necessary.

While the FCA says that it is too early to determine if financial redress will be required, there is now a greater likelihood of this being the case than when the review started.

If the FCA decides not to introduce an alternative way of dealing with complaints, they will instruct firms to resume handling complaints as before.

Barings Law is in consultation with the FCA and will, as soon as possible, provide feedback to our clients on any extension to the deadline for resolutions. We will also continue to communicate with lenders, seeking confirmation of whether a DCA was used or not.

We will keep our clients updated with further information as we receive it.

If you believe you have been mis-sold your car finance agreement, there is still time to submit a claim with Barings Law.

Our legal experts specialise in financial mis-selling, and we’re here to help you navigate the complexities of your case.

What’s more, your mis-sold motor finance claim will be carried out on a no-win no-fee basis, meaning there is no financial risk to you for making your claim. If we do not win your case for you, you won’t pay us a penny for our services.

All you need to do is fill in the form by clicking the button below. Our customer service team will obtain the documentation you have gathered, most importantly your finance agreement, so that our dedicated legal team can get to work investigating your case.

Pursue Legal Action with Barings Law

If negotiations with the lender or dealership prove unsuccessful, Barings Law will not hesitate to pursue further legal action on your behalf. Our experienced solicitors are well versed in handling cases related to mis-selling, and we will work tirelessly to fight for your best interests in court.

With Barings Law by your side, you can trust that your case will be handled with the highest level of expertise and professionalism, giving you the best possible chance of securing a favourable outcome.