FCA intervenes in the Motor Finance Sector

What has the FCA announced?

The FCA is appointing a single skilled person (under s166 FSMA) to report on the extent of firms’ non-compliance and associated loss to consumers going back from 2021 to before the FCA took over regulation of the sector in 2014. 

Whilst this first phase of skilled person work has several firms in scope, there is the possibility that the s166 may be extended to other firms.  For the firms in scope of the skilled person’s review, the next 8-12 weeks will be a period of intensive activity including gathering data and case files for the skilled person.  The output should enable the skilled person to get a granular picture of historic commission issues and understand the diversity of the caseload and help the FCA to decide whether consumer complaints should continue to follow the existing course or if an alternative approach is needed to resolve this issue. 

In addition, all firms will be affected by the other parts of the FCA’s intervention: following increasing numbers of consumer complaints and the first of FOS’s final decisions, the FCA is extending by 37 weeks the time period for firms to consider complaints relating to “discretionary commission arrangements”, and the time consumers have to refer such complaints to the FOS (from 6 to 15 months). 

The FCA expects to communicate its decision on next steps by 24 September 2024, the date before the pause to complaint handling time limits is due to end.