The Financial Conduct Authority (FCA) will probe historic discretionary commissions in the UK’s motor finance market after finding customers continue to lose out.
After banning models linking brokers’ commission to interest rates charged to customers for motor finance in 2021, the FCA said many were now struggling to claim compensation.
Despite a “high number of complaints,” the FCA said, “firms are rejecting most complaints because they consider that they have not acted unfairly”.
Historic finance commissions will be reviewed by the FCA as a result, with the eight-week deadline for finance firms to respond to complaints also being pushed back.
“This is to prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while we assess the issue and determine the best way forward,” the FCA said.
Some rejected complaints have been reviewed by the Financial Ombudsman Service, which has found in favour of two recently rejected customers.
“This is likely to prompt a significant increase in complaints from consumers to firms and the Financial Ombudsman,” the regulator explained.
“If we find there has been widespread misconduct and that consumers have lost out, we will identify how best to make sure people who are owed compensation receive an appropriate settlement.”