Comment on DCA Cases by Broadstone Unveiled
In a recent development, the Financial Conduct Authority (FCA) has announced an extension of the deadline for motor finance firms to provide a final response to customer complaints regarding discretionary commission arrangements (DCAs) until 4 December 2025. This move comes as part of the FCA's motor finance redress scheme, aimed at addressing cases where discretionary commissions were paid to car dealers without proper disclosure to consumers.
The scheme, proposed following the UK Supreme Court's ruling on motor finance commission cases, aims to offer compensation to affected consumers starting in 2026, after consultation in October 2025. To determine whether a case is considered "unfair" and therefore eligible for redress under the Consumer Credit Act 1974 (CCA), the FCA and courts will consider an individualized, fact-sensitive enquiry focusing on the fairness of the relationship between the consumer and lender.
Factors such as proper disclosure of commission, the level of commission relative to total finance fees, the nature of the relationship, the impact on the consumer's overall cost, and whether the consumer was misled or disadvantaged by non-disclosure or high commissions will be taken into account. The scheme may also look at discretionary versus non-discretionary commission arrangements between 2007 to 2021 for potential inclusion.
In a separate development, Broadstone, a leading independent financial services consultancy, has published an update to their Defined Benefit (DB) Redress Tracker. The publication of the Defined Benefit (DB) Redress Tracker is relevant to the insurance brokers sector and provides compensation levels for those who were ill-advised to jump ship from DB pension schemes in the past.
The Defined Benefit (DB) Redress Tracker is a quarterly update published by Broadstone, and the latest update shows compensation due to those who were previously ill-advised to transfer from DB pension schemes.
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In conclusion, the FCA's motor finance redress scheme and Broadstone's Defined Benefit (DB) Redress Tracker updates aim to provide a structured, regulatory-backed route for consumers to claim compensation where there was an "unfair" relationship caused by hidden or excessive commissions that were not properly disclosed. It's essential for consumers to stay informed about these developments to ensure they are aware of their rights and can take action if necessary.
Businesses operating in the motor finance sector should pay attention to the FCA's extension of the deadline for addressing consumer complaints regarding discretionary commission arrangements (DCAs). This deadline, now extended to 4 December 2025, is part of the FCA's motor finance redress scheme, which aims to provide a structured, regulatory-backed route for consumers to claim compensation.
The finance industry, particularly insurance brokers, might find the updates to Broadstone's Defined Benefit (DB) Redress Tracker relevant. This publication offers compensation levels for individuals who were ill-advised to leave DB pension schemes, emphasizing the need for thorough disclosure in financial transactions.
