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Vehicle finance complaints gather speed

25 January 2024. Published by David Allinson, Partner and Rachael Healey, Partner

Following on from our recent blog on the changes to the FCA's complaint handling rules for complaints involving discretionary commission arrangements, the FOS has now published dedicated webpages concerning such complaints.

RPC recently published a blog on the FCA's temporary extension of certain timeframes for complaints concerning discretionary commission arrangements (DCAs) being used in vehicle financing. In brief, for purchases involving DCAs, businesses will have up to 45 weeks to respond (rather than 8) and consumers will have 15 months (rather than six) in which to refer a complaint to FOS. The new timeframes will apply to complaints made to the finance broker or lender between 17 November 2023 and 25 September 2024.

Hot on the heels (or perhaps, hot on the wheels) of the FCA's announcement, FOS has published dedicated webpages for both businesses and consumers.  These discuss the FCA's alteration to timeframes for DCA complaints in some detail, whilst stressing that this will not affect how FOS will progress such complaints.

The 'consumer' page also highlights some general concerns that complainants tend to raise with FOS, including that they were not told by the car dealer that they would receive commission from the lender, that the commission model itself was unfair and that they did not receive the best rate available on the finance taken out. The 'business' page sets out what evidence FOS will probably require from a firm on referral, and stresses that FOS expects businesses to investigate such complaints thoroughly.

Readers of our previous blog will recall that the FCA's policy statement (PS24/1) noted that approximately 10,000 complaints regarding vehicle finance had been referred to FOS, with 90% of these being referred since the start of 2022, so it's perhaps no surprise to see FOS address DCAs specifically on their website. A number of interested parties will be closely watching how FOS (and the FCA) approaches these matters, given the overall exposure that 10,000 plus complaints could bring.