The Financial Conduct Authority says it would now work hard to “bring greater certainty for consumers firms and investors” following the landmark judgement by the UK’s Supreme Court regarding the ways motor finance firms have paid commission to automotive dealers.
The patron credit regulator was already looking into historic use of discretionary commission arrangements (DCAs), which it banned in 2021, following some Financial Ombudsman Service rulings when other rulings judged by the Court of Appeal brought that work to a halt.
It had already hinted that it found there was some “issues” to consumers from DCAs and, depending whether the problems were widespread, it would implement a consumer redress scheme to compensate those affected.
Awaiting the Supreme Court’s final decision on the lesser court’s judgement, the FCA said it might resolve inside weeks about how a redress scheme might work for those customers affected by DCAs.
An FCA spokesperson has now told Automotive Management that it would take a while to digest the judgement, and its team will work through the weekend to find out its next steps.
“We said we might set out inside six weeks whether we might seek the advice of on a redress scheme. But we wish to supply clarity as quickly as possible. So, we are going to confirm whether we are going to seek the advice of on a redress scheme before markets open on Monday 4 August.
“Our goals remain to be certain that consumers are fairly compensated and that the motor finance market works well, given around 2 million people depend on it yearly to purchase a automotive.
“If we do resolve to propose a redress scheme, we’ll seek the advice of widely. In designing a redress scheme, as now we have previously said, we are going to balance principles including fairness, timeliness, and certainty.”
The spokesperson added: “We welcome that the Supreme Court has clarified the law and are grateful to the Court for delivering the judgment after the market closed.”
Lord Reed, president of the Supreme Court, said it had taken note of the FCA’s concerns for any stock market disruption cause by its landmark judgement and due to this fact it had comply with, unusually, deliver its judgement late on Friday after the markets had ended trading for the weekend.
The FCA spokesperson concluded: “We would like to bring greater certainty for consumers, firms and investors as quickly as possible.”
This Article First Appeared At www.am-online.com
