Redress scheme option gains ground as FCA deliberates on motor finance complaints

A consumer redress scheme is becoming a more likely outcome of the FCA review of the motor finance sector's use of discretionary commission arrangements (DCAs). The review into possible overcharging, which began in January, became bogged down this summer but the regulator now appears confident that it will be able to announce its next steps in May 2025.

By Neasa MacErlean

Giving its latest update, the Financial Conduct Authority mentioned a redress scheme and said: "It is too early to say if we will intervene in this way, but based on our work so far, it is more likely than when we started our review." The timetable now takes into account a judicial review proceeding brought by Barclays Partner Finance into a Financial Ombudsman Service decision to uphold a DCA complaint. That hearing is to take place in October, giving enough time for the FCA to include the resulting judgment, as well as others going through the Court of Appeal, in its decision-making. The FCA is also completing its own data collection and analysis programme.