An update on car finance commission complaints

We currently have around 20,000 open complaints related to car finance commission. In January 2024, we published our first, representative, final decisions fully addressing the arguments we’ve received across a range of motor finance complaints.

Our role is to ensure that everyone with a valid complaint gets fair compensation. And – no matter what the outcome of a complaint – we want to provide clear, reasoned answers at the earliest opportunity.

This is so that customers can better understand their position, and financial firms can apply the learnings to their handling of similar complaints. 

Judicial review and other court proceedings

In March, three court cases relating to car finance commission were granted permission to go to the Court of Appeal. The Court of Appeal hearing has not yet taken place. The Court of Appeal’s decision is expected to consider how the law relating to secret and half-disclosed commission might apply to motor finance commission payments. 

In April, Clydesdale Financial Services Limited – trading as Barclays Partner Finance – started judicial review proceedings in relation to one of our decisions. The judicial review hearings have not yet taken place.

We recognise that both the judicial review and the Court of Appeal’s decisions could have an impact on our approach to complaints that include similar issues.

What this means for complaints

In January, the Financial Conduct Authority (FCA) announced a review of the historical use of motor finance discretionary commission arrangements. As part of this, the FCA paused the requirement for firms to issue final responses in some DCA (Discretionary Commission Arrangement) cases. The FCA has committed to provide further information about next steps by 24 September 2024. 

At this point, we don’t know when we can expect the decisions from the courts. That means we’re unlikely to be able to issue final decisions on affected cases for some time.

However, while both the FCA review and court proceedings take place, we’ll continue to accept and investigate complaints as far as we can, to ensure that we:  

• have the information we need to decide the complaint as soon as it is appropriate to do so 
• can identify whether the complaint is likely to be affected by court proceedings
• can issue investigator provisional assessments, and ombudsman final decisions where appropriate, on cases that aren’t affected by the legal action.  

Deputy Chief Ombudsman, James Dipple-Johnstone, said:

When people take out a car loan, it’s imperative they are treated fairly and the financial implications are totally transparent.

We have heard from more than 20,000 people with concerns that they were charged too much for their finance.

It is disappointing that ongoing legal proceedings around motor finance commission have impacted our ability to issue final decisions in some of these cases.

However, we’re determined to progress consumers' complaints as far as we can, and firms should continue to investigate and respond to complaints promptly.”

We have published information for customers who want to make a complaint. This explains more about our investigation process and how we can help with car finance commission complaints.

We’ve also published information for financial businesses who are responding to complaints, which explains:

• our current approach to cases
• how the FCA’s current guidance about car finance complaints applies to complaints, and
• what we need financial businesses to send us when we receive a complaint about car finance commission.

We will continue to update these pages so that our customers can access the latest information on how we are handling complaints about car finance commission.