Commission Disclosure to be Reviewed and Complaints Paused

05 February 2024

Since the 2021 FCA rule changes regarding sales commissions, one of the more common issues in the Motor Industry has been the extremely high number of solicitors and claims management firms seeking to prosecute civil claims for return of commissions earned during the sale of vehicle finance.

In a series of previous articles, we detailed the arguments/issues involved and provided template responses for the most common types of these claims. Over the last two years we have put these arguments into practice for several MILS members and we are proud to say that to date we have not only dissuaded several claimants from bringing cases but have successfully defended all claims brought before the courts in which we have been involved.

We are now starting to see a different tack being taken, with an escalation in the number of complaints being taken to the Financial Ombudsman’s Service.

The FCA are concerned that Firms are rejecting most complaints because they consider that they have not acted unfairly nor caused their customers loss based on the applicable legal and regulatory requirements. However, in two recent decisions the FCA has reviewed the sales processes and found in favour of the consumers. The FCA is also concerned that some cases have succeeded in court.

This surge of complaints has now prompted the FCA to use powers under s166 of the Financial Services and Markets Act 2000 to instigate a review of sales of historical motor finance commission.

As a result of this investigation all complaints regarding commission claims have been paused for 37 weeks. This pause will apply to complaints received by firms on or after 17 November 2023 and on or before 25 September 2024.

A link to the full FCA announcement can be found at: