Car finance - hidden commission payments
Discussion
FCA has extended the decision timescale to May 2025 and a pause on complaints continues to December 2024 at the earliest
https://www.am-online.com/news/fca-won-t-set-out-n...
The Financial Conduct Authority (FCA) has confirmed it will set out the next steps into its review of discretionary commission arrangements (DCA) in May 2025.
The original review was due to be completed in September this year.
A pause on complaint handling in relation to DCAs will also be extended until December 4, 2025.
Under the FCA’s proposals, firms will not have to issue a final response to DCA complaints until after December 4 at the earliest.
The FCA said this is due to the fact that its next steps could involve consulting on a redress scheme and it may take until December to confirm how this would be implemented by finance firms. It also said the volume of complaints coming through in relation to DCAs threatened to "overwhelm" the current systems in place to deal with them.
It's now more likely that there will be structured redress system put in place for consumers by the FCA, although no final decisions have been made yet
The FCA said that moving back the results of the review to May 2025 will also give it more time to analyse the data it has collected from firms and assess the outcome of the Barclays judicial review of the Financial Ombudsman’s decision to uphold a DCA complaint.
The regulator also said that while some firms had provided the necessary data, others hadn’t within the requested deadline and this has slowed down the review process.
Nikhil Rathi, FCA chief executive, said in the regulator's official Inside FCA podcast: "When these DCAs were used before the ban, were they operating in a way that was consistent with regulation at that time?
"We are assessing all that data to understand if there were breaches of law and how widespread they were. If there have been breaches, what is the fair route to redress for consumers?
"We have to understand the scale of the issue, but we also have to make sure the market functions well now and in the future. We have to ensure any action we take will support the supply of motor finance that consumers depend upon. It's important that the market continues to function fairly and well in the future too."
In a statement the FCA explained: “Our next steps could involve consulting on a redress scheme.
“This is why we intend to take the precautionary step of pausing complaint handling until 4 December 2025, as it may take until then to confirm how firms would implement it.
“Or it could involve asking firms to start dealing with complaints again as usual, in which case we would consult on ending the pause earlier.
“If we can set out our proposed next steps sooner, we will.”
https://www.am-online.com/news/fca-won-t-set-out-n...
The Financial Conduct Authority (FCA) has confirmed it will set out the next steps into its review of discretionary commission arrangements (DCA) in May 2025.
The original review was due to be completed in September this year.
A pause on complaint handling in relation to DCAs will also be extended until December 4, 2025.
Under the FCA’s proposals, firms will not have to issue a final response to DCA complaints until after December 4 at the earliest.
The FCA said this is due to the fact that its next steps could involve consulting on a redress scheme and it may take until December to confirm how this would be implemented by finance firms. It also said the volume of complaints coming through in relation to DCAs threatened to "overwhelm" the current systems in place to deal with them.
It's now more likely that there will be structured redress system put in place for consumers by the FCA, although no final decisions have been made yet
The FCA said that moving back the results of the review to May 2025 will also give it more time to analyse the data it has collected from firms and assess the outcome of the Barclays judicial review of the Financial Ombudsman’s decision to uphold a DCA complaint.
The regulator also said that while some firms had provided the necessary data, others hadn’t within the requested deadline and this has slowed down the review process.
Nikhil Rathi, FCA chief executive, said in the regulator's official Inside FCA podcast: "When these DCAs were used before the ban, were they operating in a way that was consistent with regulation at that time?
"We are assessing all that data to understand if there were breaches of law and how widespread they were. If there have been breaches, what is the fair route to redress for consumers?
"We have to understand the scale of the issue, but we also have to make sure the market functions well now and in the future. We have to ensure any action we take will support the supply of motor finance that consumers depend upon. It's important that the market continues to function fairly and well in the future too."
In a statement the FCA explained: “Our next steps could involve consulting on a redress scheme.
“This is why we intend to take the precautionary step of pausing complaint handling until 4 December 2025, as it may take until then to confirm how firms would implement it.
“Or it could involve asking firms to start dealing with complaints again as usual, in which case we would consult on ending the pause earlier.
“If we can set out our proposed next steps sooner, we will.”
Nikhil Rathi, FCA chief executive, said in the regulator's official Inside FCA podcast: "When these DCAs were used before the ban, were they operating in a way that was consistent with regulation at that time?
It's very surprising that none of the banks had hugely expensive Legal or Compliance departments to check this sort of thing between 2007 and 2021 and instead just left it to chance and kept their fingers crossed.....
It's very surprising that none of the banks had hugely expensive Legal or Compliance departments to check this sort of thing between 2007 and 2021 and instead just left it to chance and kept their fingers crossed.....
OddCat said:
Nikhil Rathi, FCA chief executive, said in the regulator's official Inside FCA podcast: "When these DCAs were used before the ban, were they operating in a way that was consistent with regulation at that time?
It's very surprising that none of the banks had hugely expensive Legal or Compliance departments to check this sort of thing between 2007 and 2021 and instead just left it to chance and kept their fingers crossed.....
Car finance boomed post GFC precisely because its regulation was considerably more lax than other forms. One also has to take into consideration how regulation actually works. It's generally 'guidance' so if you look around and see all your competitors doing something such as marking up and not revealing the mark up to the consumer (as is explicitly required in industries where this was previously rife) then one feels not just relatively assured that there won't be any issues doing likewise but that to do anything else would be tremendously bad for business, ie you wouldn't get any. It's very surprising that none of the banks had hugely expensive Legal or Compliance departments to check this sort of thing between 2007 and 2021 and instead just left it to chance and kept their fingers crossed.....
It's not so much about questioning the lenders but questioning the FCA and asking them why they sanctioned this for so long when it was clearly a practice banned by them in other consumer fields due to its inherent damage to clients? What exactly was the FCA doing during this period when car credit was booming and becoming one of their largest consumer remits after mortgages and credit cards and yet there was no review of guidance and at no point were lenders not of the belief that they were in compliance with existing guidance despite everyone knowing just how woefully out of date it was?
It's all too easy to blame the money lenders but to be honest, this is a clear cut regulatory failure. One that has been highlighted repeatedly on PH since the early Noughties and I know for a fact brought to the attention of the FCA over this period.
What I would also question is whether any captive finance entities of overseas car manufacturers have been lobbying regulators? I'd start with VWFS. For some strange reason I think that if one were to search then one might find.
sugerbear said:
DonkeyApple said:
fourstardan said:
News today is annoying.
However being an optimist it maybe suggests we'll have some compo eventually.
It ought to be paid by the regulator though. It is their failing. However being an optimist it maybe suggests we'll have some compo eventually.
sugerbear said:
DonkeyApple said:
fourstardan said:
News today is annoying.
However being an optimist it maybe suggests we'll have some compo eventually.
It ought to be paid by the regulator though. It is their failing. However being an optimist it maybe suggests we'll have some compo eventually.
sugerbear said:
Sheepshanks said:
I always take PCP to get discounts then Withdrew from them - can I still claim?
I did let one run, but that was 0%. I guess somewhere in the deal that must have been funded. Shall I whack in a claim for that?
Yes to the first one if you paid any interest. I did let one run, but that was 0%. I guess somewhere in the deal that must have been funded. Shall I whack in a claim for that?
No to the 2nd one. Its in the guidence notes.
On the first one I Withdrew from with VWFS I did get charged £30 interest.
Did it again recently and was quite surprised that, unprompted, they said they'd waive the interest charge.
I did always wonder on what basis they charged interest, because Withdrawing is supposed to be like the agreement never existed. Maybe for the sake of a few quid, VWFS has decided not to get into possible future arguments about it?
phpe said:
FCA has extended the decision timescale to May 2025 and a pause on complaints continues to December 2024 at the earliest
https://www.am-online.com/news/fca-won-t-set-out-n...
The Financial Conduct Authority (FCA) has confirmed it will set out the next steps into its review of discretionary commission arrangements (DCA) in May 2025.
The original review was due to be completed in September this year.
Am I reading this correctly? The 25th September deadline has been moved to May next year? I've had a response from Honda admitting that there was a discretionary commission on a finance deal I had with them. https://www.am-online.com/news/fca-won-t-set-out-n...
The Financial Conduct Authority (FCA) has confirmed it will set out the next steps into its review of discretionary commission arrangements (DCA) in May 2025.
The original review was due to be completed in September this year.
So I won't hear back until May next year now?
Ive heard back from Ford to say my finance didnt have this, but someone I work with had a different rate so seems odd, im tempted to just log with the FCA so it doesnt time out to see what they say,
On them pushing it back, could it be Martin Lewis got involved and the flood means its a bigger deal then anyone expected?
On them pushing it back, could it be Martin Lewis got involved and the flood means its a bigger deal then anyone expected?
Hi everyone. Like a lot of folks I was alerted to this via MLs moneysaving site. I used their form to submit my details to BMW Financial services. This was early July so two months ago. I got initial automated response to say they'd received it. I thought I'd have heard something by now.
Also I had the full details of one car but only the registration number of my first car on finance, will that be sufficient information for them?
Finally I have the agreement documents for more recent car. Would there be anything on it that would tell me if I'm affected or not?
Also I had the full details of one car but only the registration number of my first car on finance, will that be sufficient information for them?
Finally I have the agreement documents for more recent car. Would there be anything on it that would tell me if I'm affected or not?
CooperS said:
Think I better investigate if I’m owed anything
I see your username is Cooper so presumably you had a mini, if it was financed then out in a form especially if it was BMW Financial services. Five minutes is the most it takes to fill it in if you have your details to hand. If not check your Inbox for emails from the financial provider they might contain relevant information. MercedesClassic said:
Hi everyone. Like a lot of folks I was alerted to this via MLs moneysaving site. I used their form to submit my details to BMW Financial services. This was early July so two months ago. I got initial automated response to say they'd received it. I thought I'd have heard something by now.
Also I had the full details of one car but only the registration number of my first car on finance, will that be sufficient information for them?
Finally I have the agreement documents for more recent car. Would there be anything on it that would tell me if I'm affected or not?
I had 2 agreements via BMW Financial ( Alphera ) and besides the usual automated response got nothing else back despite one further chase up.Also I had the full details of one car but only the registration number of my first car on finance, will that be sufficient information for them?
Finally I have the agreement documents for more recent car. Would there be anything on it that would tell me if I'm affected or not?
Given the extended deadlines now in place I've just left this for now.
From what I have seen so far from other replies just giving the reg number and basic details ( ie when the agreement was taken out ) seems to be sufficient detail.
alscar said:
I had 2 agreements via BMW Financial ( Alphera ) and besides the usual automated response got nothing else back despite one further chase up.
Given the extended deadlines now in place I've just left this for now.
From what I have seen so far from other replies just giving the reg number and basic details ( ie when the agreement was taken out ) seems to be sufficient detail.
Thanks for your reply. I'm of the same opinion, they might be holding off on responding as the deadline has been put back quite a bit. We'll just have to sit tight. Given the extended deadlines now in place I've just left this for now.
From what I have seen so far from other replies just giving the reg number and basic details ( ie when the agreement was taken out ) seems to be sufficient detail.
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