The Financial Conduct Authority (FCA) has extended the time that lenders will have to respond to complaints about motor finance agreements that did not involve a discretionary commission arrangement (DCA) – and has brought leasing agreements into the process for the first time.
Firms now have until 4th December 2025 to provide a final response to complaints over non-DCA finance, the decision following a similar extension the FCA has already issued for complaints involving DCAs.
On 25th October the Court of Appeal found in favour of three complaints against lenders concerning agreements involving DCAs – deciding it was unlawful for the car dealers to receive a commission from lenders providing motor finance without first telling the customer about the commission and getting their informed consent to the payment.
The decision caused consternation in the industry and several lenders briefly paused their business as a result. The lenders involved immediately announced an intention to appeal and on 11th December the Supreme Court confirmed it would hear an appeal.
The FCA concluded that firms who provide motor finance across the industry are likely to receive a high volume of complaints in response to the judgment and so announced its extension. “We have extended the time firms have to handle complaints to help prevent disorderly, inconsistent and inefficient outcomes for consumers and firms,” an FCA statement said.
The statement added that consumers making a complaint will have until the later of 29th July 2026 or 15 months from the date of their final response letter from the lender, to refer a non-DCA complaint to the Financial Ombudsman – this is instead of the usual six months.
The FCA also confirmed that the extension will include complaints involving motor leasing agreements, which the Court of Appeal judgement did not involve. Making its decision “following feedback received during our consultation,” the FCA stated that 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 FCA has been undertaking a review to understand if there was widespread misconduct related to DCAs before they were banned in 2021, if consumers have lost out and, if so, the best way to make sure appropriate compensation is paid in an orderly, consistent and efficient way.
As part of this lenders were given more time to react to complaints involving DCAs and consumers more time to refer their complaints to the Financial Ombudsman.
In September the FCA further extended its complaint deadline to 4th December 2025, stating that it had taken longer than expected to get the data needed for the review.
The authority also wanted to take account of court decisions such as that by the Court of Appeal, and has confirmed that it intends to apply to formally intervene in the case before the Supreme Court to share its expertise.
The FCA now intends to set out next steps in its review of DCAs in May 2025 and hopes to provide an update on non DCA-related motor finance cases at the same time.
