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FCA Extends The 8-week Deadline To Investigate Complaints About Motor Finance Discretionary Commissions

Thursday, 11 January 2024

The FCA today announced it has decided to pause the 8-week deadline for motor finance firms.  This is to provide firms with sufficient time to consider complaints in a consistent and efficient manner, where discretionary commission has been involved.  The FCA is using its powers under s166 of the Financial Services and Markets Act 2000 to review historical motor finance commission arrangements.

FCA to undertake work in the motor finance market | FCA

With immediate effect firms will now be able to delay the release of their Final Resolution Letters for 37 weeks (approximately 9 months) with 5 weeks from the 25th September to 30th October 2024 to provide their final response. At the same time, the consumers right to refer the matter to the Financial Ombudsman Service is being extended to 15 months from the usual 6 months.

This rare step from the FCA shows how complex the issue of discretionary commission complaints has become, and how it is trying to balance the need to protect consumers with the need to ensure that motor finance firms have clear guidance on how to investigate complaints of this nature.

As illustrated by the two Financial Ombudsman Service decisions published (one final decision is 64 pages long Decision Reference DRN-4188284 ( and one is 70 pages long Decision Reference DRN-4326581 ( the investigations required are complex and require firms to have very clear records and evidence when deciding the outcome of a complaint.

With this extension, many firms may decide that they can now take their time to investigate complaints, or in fact do nothing until the FCA provides further guidance. However this does not account for the following:

  • In a separate update on its website Car finance complaints | FCA the FCA has reminded consumers that this extension should not prevent or delay them from complaining, as they will still need to complain within 6 years of the problem happening or within 3 years of them becoming aware of the problem.
  • This update from the FCA is likely to create additional media scrutiny of the issue and drive CMCs to increase their marketing campaigns to find consumers that may have been impacted. We should not be surprised if we see an increase in adverts, asking if you’ve ever had a motor finance agreement.
  • With 37 weeks to investigate a complaint, the Financial Ombudsman Service is unlikely to accept firms submitting incomplete files, or trying to rely on statements such as “we would have…” and “we do not have records, but we believe…”

This extension should therefore be considered as an opportunity for firms to ensure that they are ready for all eventualities. This is likely to include ensuring they have:

  • Enough trained staff available to investigate complaints, now and once the FCA issues updated guidance.
  • Commenced full data gathering to ensure they have all available evidence to allow them to investigate the issues raised by the consumer.
  • Robust processes and procedures in place to manage mass claims from customers and CMC’s.
  • Identified opportunities to automate parts of the process, including providing updates to customers, who are likely to need regular updates over the 37 weeks.
  • Looked at how they will work with brokers to obtain information on the work they did when negotiating the motor finance agreement, including what alternatives were looked at.
  • A clear, efficient process for preparing files for the Financial Ombudsman Service.
  • How to manage vulnerable customers and ensure their needs are met.

How Equiniti can help

Equiniti is well-placed to help motor finance firms respond to this increase in work.  We provide specialist consultancy, resource, managed services, and technology to financial services organisations. Our award-winning complaints management system, Charter MMX, and our Complaints Insight Service, allow firms to manage their complaints efficiently and complete real-time root cause analysis and identify systemic trends.

If your firm is reviewing your resource models or if you would be interested in discussing how Equiniti can help your firm, please get in touch. 

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