Motor Finance Discretionary Commission Complaints
During 2024 motor finance had a high public profile. Below we outline regulatory developments and how you can make a complaint to DLL.
Update – 28th November 2024
On 25th October 2024, the Court of Appeal ruled on three cases involving car finance. In these cases, the Court of Appeal decided that it was unlawful for the dealers (who were acting as “credit brokers” when arranging finance for the claimants) to receive a commission from a lender without first telling the customer about the commission and getting their informed consent to the payment.
What amounts to informed consent will depend on the facts of each case. In these cases, it included telling the customer about the amount of commission and how it was calculated as well as any other relevant information which might have impacted on the credit broker’s impartiality.
As a result of this judgement, we have made some changes to the way we disclose commission. Prior to entering into a finance agreement with you, we will:
a) inform you of the amount of commission that we will pay to the credit broker in connection with your finance agreement, as well as the basis of payment and any other relevant information which may have influenced the credit broker’s decision to introduce you to us; and
b) seek your consent prior to paying any commission to the credit broker.
As noted below, in January 2024, the FCA introduced a temporary pause to the eight-week deadline for firms to resolve complaints regarding discretionary commission. Following this recent Court of Appeal decision, the FCA is currently consulting on whether to extend this pause to all types of car finance commission complaints and will provide a further update on 19th December 2024.
Update – 24th September 2024
On 24th September 2024, the FCA announced that it had extended the pause to the deadline for motor finance firms to provide a final response to customer complaints regarding discretionary commission arrangements (DCAs) until 4th December 2025. We have reflected this change in the dates below.
Motor Finance Discretionary Commission Complaints
On 11th January 2024, the Financial Conduct Authority (FCA) announced that it was undertaking a review of historical discretionary commission arrangements (DCA) in the motor finance sector, this was in response to a high number of complaints motor finance providers were receiving from customers.
The FCA describes a DCA as an arrangement where a finance provider allowed a third-party broker or dealer, who arranged the finance, to adjust the interest rate they offered to customers to generate a commission. Typically, the higher the interest rate, the more commission generated.
Further information for customer’s affected by the FCA’s review can be found on the FCA website: https://www.fca.org.uk/consumers/car-finance-complaints
Whilst the FCA conducts its review, it has introduced a temporary pause to the eight-week deadline to resolve DCA complaints. This pause is to allow finance providers additional time to ensure that complaints are dealt with fairly, in a consistent, efficient and orderly way. This pause will apply to your DCA complaint if:
• Your finance agreement was a regulated hire purchase agreement (not a regulated hire agreement), and the asset was a motor vehicle.
• Your finance agreement is dated between 6th April 2007 & 28th January 2021.
• A third-party (broker or dealer) was paid a discretionary commission in connection with your finance agreement.
You can refer your DCA complaint to us in the usual way https://www.dllgroup.com/gb/en-gb/about-us/Complaints-Handling, however with effect from 11th January 2024, there will be the following changes to our complaint handling procedures for DCA complaints:
• We will provide a final response to your complaint by 4th December 2025 at the earliest.
• If you made an eligible DCA complaint before the 11th January 2024, the eight-week deadline for a final response from us has been paused and will resume on 4th December 2025, at the earliest.
• During the pause, we will continue to progress your complaint by investigating and collecting information that will assist us with a providing final resolution.
• If you are unhappy with our final response, you will have additional time to send your complaint to the Financial Ombudsman Service (FOS). You usually have 6 months from the date of the final response letter, however for eligible DCA complaints you will have up to 15 months from the date of the final response letter.
The complaints handling procedure set out above applies to eligible DCA complaints only. Any other type of complaint will be handled in accordance with our standard complaint handling process, which can be found here. https://www.dllgroup.com/gb/en-gb/about-us/Complaints-Handling
Making a DCA complaint
You can submit a complaint to us via:
• Online: Please use the form below
• Call: Our Customer Services Team are available from 08:00 to 17:00 Monday to Friday on 01923 810016.
• Email: complaints.uk@dllgroup.com; we are available from 08:00 to 16:00 Monday to Friday
• Post: De Lage Landen Leasing Ltd, PO Box 430, Watford, WD18 8EZ
When you contact us, please help us to respond by supplying us with the following information: