Information for firms on motor finance complaints 

• We expect your firm to respond to consumer queries in line with your existing policies. You can refer customers to our consumer webpage for more information on how the rules affect them.
• In line with the customer support outcome under the Consumer Duty, you should respond promptly to queries from customers on whether their motor finance agreements included a commission arrangement, as this may help them decide if they should make a complaint.
• You must update the information you publish for consumers on how you handle complaints, for example, information on your website. This is to make sure consumers are informed of the extension to sending final responses to DCA complaints and non-DCA complaints.
• For DCA complaints received between 17 November 2023 and 4 December 2025 inclusive, we’ve extended the 8-week time limit for sending a final response to the complainant. This means that, during this period, you don’t have to send final responses to DCA complainants.  
• For non-DCA commission complaints received between 26 October 2024 and 4 December 2025, inclusive, we’ve extended the 8-week time limit for sending a final response to the complainant. This means that, during this period, you don’t have to send final responses to non-DCA commission complaints.  
• For example, if you received a complaint 3 weeks before the extension started you will have 5 weeks from when the extension ends to issue a final response.  
• Your written acknowledgement to DCA and non-DCA commission complaints, must inform the consumer of the extension to the time limits for dealing with their complaint. You must also refer them to fca.org.uk/carfinance which explains the reason for the extension. If you want to utilise the extension, you’ll need to identify whether a complaint is a motor finance DCA complaint or a motor finance non-DCA commission complaint to understand which rules to apply when communicating with consumers. Our expectation is that you’ll do this within 8 weeks to prevent complaints from being unnecessarily referred to the Financial Ombudsman and potentially being charged a case fee.
• If you’ve already sent a written acknowledgement to a DCA complaint or a non-DCA commission complaint, you must promptly write to the complainant and explain the extension. Communications can be sent electronically. If you’re aware that a consumer could have difficulty in accessing information electronically, you should take reasonable steps to communicate with them in an alternative format.
• In cases where you can easily identify that DCA or non-DCA commission isn’t a relevant consideration, you should provide a final response (ie within 8 weeks). Examples of where it might be appropriate for you to provide a final response while the pause is in place include:  
  • Where a consumer who has previously complained about commission, and received a final response, wishes to raise a different complaint.
  • Where it’s possible to resolve the complaint without considering any issues with commission arrangements.
• You must write to complainants who were sent a final response to a non-DCA commission complaint between 21 June 2024 and 19 December 2024 inclusive. You must explain that they now have until 29 July 2026 to refer their complaint to the Financial Ombudsman.
• If you send a final response to a DCA complaint between 12 July 2023 and 29 April 2025, you must give complainants until 29 July 2026 to refer their complaint to the Financial Ombudsman.
• If you send a final response to a non-DCA commission complaint between 20 December 2024 and 29 April 2025, you must give complainants until 29 July 2026 to refer their complaint to the Financial Ombudsman.
• If you send a final response to a DCA or a non-DCA commission complaint between 30 April 2025 and 29 January 2026, you must give complainants 15 months to refer their complaint to the Financial Ombudsman.

• Under our general rules on record retention, you must arrange for orderly records to be kept of your business. This includes all services and transactions you’ve undertaken. You should retain records for as long as they’re relevant for the purposes for which they were made.
• Lenders and credit brokers must maintain and preserve any records that are, or could be, relevant to the handling of complaints or civil claims relating to agreements with DCAs entered into before 28 January 2021. This is regardless of whether the customer has complained or not. This requirement applies until 11 April 2026.
• Lenders and credit brokers must maintain and preserve records that are, or could be, relevant to the handling of complaints or civil claims relating to regulated credit agreements or regulated consumer hire agreements with non-DCA commission. This is regardless of whether the customer has complained or not. This requirement applies until 11 April 2026.
• If you fail to keep documents or records relating to DCA or non-DCA commission complaints, you must still investigate the complaint fairly.

• We appointed a skilled person to review historical motor finance commission arrangements and sales across several firms. We also carried out further sampling of other firms.
• We are assessing whether the sales of motor finance agreements involving DCAs fell below applicable regulatory and legal standards in place at the time.
• Our review includes sales involving discretionary commission arrangements made from 6 April 2007 to 28 January 2021. We’re looking at sales from 6 April 2007 because the Financial Ombudsman can’t generally look at complaints about this type of consumer credit before this date.
   

• If you choose to provide a final response to a DCA complainant, or make an offer of redress during the pause, you must comply with the usual requirements in DISP. This includes the complaint resolution rules in DISP 1.4 that cover investigating, assessing and resolving complaints, and co-operating with the Financial Ombudsman.
• We expect you to communicate offers of redress in a way which is clear, fair and not misleading. If payouts are being made to consumers who have not made a complaint, we expect you to explain why you are offering compensation and the implications of accepting it.

• A written holding response doesn’t start the time a complainant has to refer a complaint to the Financial Ombudsman for the purposes of DISP 2.8.2R(1). We’ve said that consumers who wish to wait and give you more time to provide them with a final response before referring their complaint to the Financial Ombudsman can do so.
• If the 8 weeks expired before the extension started and the complaint is referred to the Financial Ombudsman, you should cooperate with the Financial Ombudsman in the usual way, as required by DISP.

• The Financial Ombudsman has published an update on car finance commission complaints and information on what the Judicial Review means for complaints. It will continue to keep this updated. If you receive a request from the Financial Ombudsman, you should cooperate with it in the usual way, as required by DISP.
• If you receive a final decision from the Financial Ombudsman that's accepted by the consumer, we expect you to pay any award by the date given in the decision.

• Authorised firms must meet our Threshold Conditions and Principles for Businesses, which require firms to have appropriate resources (see COND 2.4 Appropriate resources and PRIN in our Handbook). We set out more detail in our framework for assessing adequate financial resources (FG20/1), including the need to cover potential redress liabilities.
• We expect you to undertake an assessment of whether your firm’s financial resources are adequate. This assessment should be proportionate to the scale and complexity of your regulated activities. The assessment is expected to be forward looking and must consider the risks, and potential liabilities, your firm is exposed to, including any potential redress liabilities.
• We expect you to analyse the impact of making any capital reduction, such as dividend payments, on your firm’s ability to meet potential future liabilities that may arise.
• Accounting standards generally require firms to make provision or recognise a contingent liability in their financial statements for liabilities of uncertain timing and/or amount. You should ensure that your financial statements are accurate and up to date. This includes considering issues relevant to your firm. For example, relevant Financial Ombudsman decisions that may impact your firm, pertinent court judgments and any other issues identified from your internal review. You should engage external auditors where required.
• Under Principle for Businesses 11, we expect regulated firms to deal with us in an open and cooperative way. That includes disclosing anything we would reasonably expect to know. More detailed rules and guidance are set out in SUP 15. You must immediately notify us if you’re unlikely to have adequate financial resources in the foreseeable future, and before you take action that could materially impact capital positions or any other decisions which could result in serious detriment to a consumer.
• If your firm is part of a wider group, we expect you to engage with appropriate group stakeholders to ensure that they fully understand the possible impact on your firm.
• We’ll monitor financial resources held by your firm through existing regulatory reporting and ongoing supervisory engagement supplemented by additional data requests, where necessary. We may use our regulatory tools to intervene if we find your firm has not undertaken any assessment of adequacy of financial resources or may be at risk of not having adequate financial resources. Additionally, we’ll intervene if we identify actions that appear to be an attempt to avoid potential future liabilities. 

• The changes we’ve made don't change our expectations of firms in relation to the Consumer Duty. Read more on our expectations under the Consumer Understanding outcome following the Court of Appeal’s decision.
• You should be critically assessing your firm's customer service performance and anticipating increased customer contact. We expect you to be operationally prepared and properly resourcing your customer-facing functions to meet increased demand. 

We’re carrying out enhanced monitoring of firms at the gateway to prevent firms and individuals from attempting to avoid potential redress liabilities or otherwise facilitate phoenixing.

We will do so by:

• Carefully scrutinising the rationale for new firm or individual applications, changes in control or cancellations in this market.
• Ensuring the applicant has adequately considered, investigated these matters and calculated any potential redress liabilities.
• Establishing that applicants have provided a reasonable way to pay any potential redress that the firm anticipates may be owed in the future.
• Checking applicants have paid any unsettled or unexpired liabilities.
• Requesting verifiable evidence that the applicant has discharged, satisfied, or resolved all complaints, where we receive a request to cancel.
• Checking the applicant has taken all reasonable steps to mitigate the risk of an adverse effect of cancellation on customers.

Where, in our view, firms have taken inadequate steps to address these issues, we may ask firms to take further action. Examples of such action may include obtaining professional indemnity insurance to cover potential future claims, conducting a customer contact exercise, seeking assurance from third parties involved in business transfer scenarios, and reviewing high risk business and paying of redress where necessary.

Firms sometimes enter into deed polls when they are confident in the quality of the service they previously provided. Under a deed poll the applicant agrees to take responsibility for past services into the new firm.

Applicants that do not act appropriately will be subject to significant additional scrutiny, with the potential for their application to be refused.