Published by Jessica Weisman-Pitts
Posted on December 19, 2024
2 min readLast updated: January 28, 2026
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By Sinead Cruise and Kirstin Ridley
LONDON (Reuters) -The Financial Conduct Authority (FCA) is giving customers who struck historic finance deals to lease motor vehicles additional time to complain about commission payments, widening a review that could lead to Britain’s biggest financial redress scheme since mis-sold payment protection insurance (PPI).
The regulator is considering a sector-wide compensation scheme that analysts say could run into billions of pounds after London’s Court of Appeal ruled in October that it was unlawful for car dealers to receive commission from banks without a customer’s informed consent.
After feedback received during its consultation, the FCA said the complaint-handling extension will cover motor leasing as well as motor finance credit agreements, potentially expanding the number of affected customers even further.
“The Court of Appeal’s judgment did not involve motor leasing agreements. However, consumers also use leasing to access motor vehicles, and it is important that consumers using similar products for similar purposes are treated in the same way,” the regulator said.
The Supreme Court granted permission to appeal that ruling this month, with a final judgment due next year. The FCA said on Thursday that it would apply to formally intervene in the case to share its expertise with the court.
The finance and leasing industry, which last year issued about 52 billion pounds ($65.6 billion) of motor finance loans, could be on the hook for as much as 30 billion pounds, ratings agency Moody’s said last month.
The FCA has given lenders until Dec. 4, 2025, to respond to customers complaining about historic motor finance deals that included non-discretionary commission payments.
It also said that consumers have until July 29, 2026, or 15 months from the date of their final response letter from the relevant lender or broker, to refer unsatisfactory responses on non-discretionary commissions to the Financial Ombudsman.
Consumers typically have a deadline of six months to make such referrals.
The deadlines published on Thursday bring the treatment of non-discretionary commission complaints in line with the extension already provided for deals involving discretionary arrangements.
The FCA banned “discretionary commission arrangements” (DCAs) in 2021, under which finance providers paid car dealers commission based on the motor finance deal’s interest rate. Often, the higher the interest rate, the more commission the car dealer would receive.
($1 = 0.7930 pounds)
(Reporting by Sinead Cruise and Kirstin RidleyEditing by Karin Strohecker and David Goodman)
The Financial Conduct Authority (FCA) is a regulatory body in the UK responsible for overseeing financial markets and protecting consumers by ensuring that financial firms operate fairly.
Non-discretionary commission payments are fixed commissions paid to car dealers by lenders, which are not influenced by the terms of the finance agreement.
A compensation scheme is a program set up to provide financial redress to consumers who have suffered losses due to unfair practices or regulatory breaches.
A motor finance agreement is a contract that allows consumers to finance the purchase or lease of a vehicle, typically involving monthly payments.
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