The Financial Conduct Authority (FCA) is pressing the Supreme Court for a quick decision regarding an appeal on car finance mis-selling.
- The FCA aims to broaden its actions to include fixed commissions, potentially increasing claims.
- A recent ruling demands car dealers get informed consent for commissions, causing industry concern.
- The FCA plans to extend complaint deadlines for non-discretionary commission issues.
- Key consumer representatives support steps towards resolving transparency issues.
The Financial Conduct Authority (FCA) is urging the Supreme Court to swiftly decide on the potential hearing of an appeal concerning car finance mis-selling. This comes after a Court of Appeal ruling found it unlawful for car dealers to receive commissions from lenders without obtaining informed consent from customers, a decision covering both discretionary and fixed commissions. This ruling has generated significant concern within the automotive industry.
The FCA announced its intention to broaden its regulatory actions to encompass fixed commission arrangements, thereby significantly increasing the potential volume of claims that borrowers can make. Following extensive discussions with industry stakeholders, government bodies, and consumer representatives, the FCA is preparing to consult on extending deadlines for firms to respond to complaints about motor finance, particularly where non-discretionary commissions were involved.
In response to the Court of Appeal judgment, motor finance firms are anticipated to receive a substantial number of complaints. An extension to the complaint deadline is seen as a necessary measure to allow firms adequate time to address these complaints effectively, thereby preventing inconsistent and inefficient outcomes that could adversely affect both consumers and the market.
The FCA is preparing to communicate with the Supreme Court, urging it to make a swift decision on granting an appeal hearing and to expedite any subsequent proceedings. The outcome of this decision is crucial as it could significantly impact the market and the rights of the consumers who depend on it. Should permission to appeal be granted, the FCA has indicated its preparedness to involve itself further in the legal process.
Solicitors representing consumers have welcomed the recent developments. Coby Benson, a solicitor at Cheshire law firm Bott & Co, praised the FCA and judicial efforts to enhance transparency within the car finance sector. He noted that extending complaint timeframes and widening the scope to include both fixed and discretionary commission cases provides consumers with more opportunities for compensation.
Consumer advocacy groups also regard the FCA’s actions as beneficial. Alex Neill from Consumer Voice highlighted the potential for increased compensation for consumers. She advised customers who were previously informed that discretionary commissions did not apply to their loans now to inquire if any type of commission was involved, as they might be eligible for compensation.
The FCA’s proactive measures aim to ensure fair outcomes for consumers amidst complex car finance commission practices.
