Proficient Complaints – Update
On the 1st to 3rd of April, the Supreme Court will hear an appeal against the Court of Appeal’s judgement in relation to Discretionary Commission Arrangements (DCA’s) and Non-DCA’s.
Background
In January 2021 the FCA banned discretionary commission arrangements (DCA’s) in the motor finance sector. The ban was implemented to remove the incentive for brokers to increase the interest rate that customers pay for their motor finance, with the FCA advising firms to review their practices and where harm was identified, address it.
Following the implementation of the ban, motor finance companies began receiving a significant number of complaints from customers and claims management companies acting on their behalf, leading to varying outcomes.
In January 2024, the FCA initiated a S166 review to investigate if customers were overcharged in their motor finance agreements. To prevent differing outcomes and market disruption the FCA implemented a temporary pause on the eight week deadline that firms have to respond to motor finance customer complaints.
Current Position
The temporary pause remains in place and a date for the Supreme Court hearing has been set (01st April – 03rd April).
On the 3rd March 2025, the FCA advised if they conclude motor finance customers have lost out from widespread failings by firms, then it is likely they will consult on an industry wide redress scheme and separately consider changes to rules.
The next update from the FCA is expected to be within six weeks of the Supreme Court decision and in regard to whether they are looking to implement to redress scheme or not.
IMPORTANT – whether the FCA implements a redress scheme or not will be subject to their interpretation of the Supreme Court decision. Our opinion, is that as the FCA have mentioned a redress scheme, this will likely be the outcome and we are waiting to see what type of redress scheme the FCA will look to implement. Let’s not forget, that even with a redress scheme you will still need to respond to complaints.
How we can help
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