The Financial Conduct Authority (FCA) has opened a consultation paper - CP24/15 - regarding its ongoing review into discretionary commission arrangements (DCAs) in the motor finance industry. DCAs were a commission model which incentivised lending at a higher interest rate in exchange for the potential of higher commission payable to the finance broker. DCAs in the motor finance sector were banned by the FCA with effect from 28 January 2021, under PS20/8.

On 30 July 2024, the FCA announced its consultation on extending the complaint handling rules which it had previously published on 11 January 2024 - PS24/1. That Policy Statement gave the original date of 24 September 2024, by which the FCA planned to communicate next steps. Instead, the FCA now intends to set out next steps in May 2025.

The proposed extended deadline for motor finance lenders to respond to customer complaints pertaining to DCAs is now 4 December 2025.

It is also proposed that customer complainants who receive a final response to their DCA complaint be given until at least 29 July 2026 to refer their complaint to the Financial Ombudsman if they so choose.

The FCA consultation is open until 28 August 2024. Submissions can be made via post, email or the online web form.

Thereafter, the FCA will publish a Policy Statement containing the feedback and its final set of rules by 24 September 2024.