Drivers have been left furious over the UK regulator’s decision to delay refunds to customers who have been overcharged on their car finance by a whole year.
The Financial Conduct Authority has paused the Discretionary Commission Arrangement response to December 4, 2025, but will still publish it’s ruling in May 2025.
This means that drivers who overpaid on car finance commission will have to wait another year to see funds return to their pockets as the regulator gives companies more time.
It comes after the regulator announced a pause for the eight-week deadline for a final response to relevant customer complaints in July.
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The FCA will still report on its findings in May 2025
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The move now means drivers will be forced to wait another year before the firms will have to give a response to drivers and in many cases refunds.
The car finance issue saw drivers overpay interest rates when purchasing a vehicle between 2007 and 2021. Since then more than 1.2 million drivers have come forward with complaints.
Under DCA schemes, drivers were charged more each month for car repayments which went straight to brokers and car dealers who received the additional funds as commission.
On July 30, the regulator proposed to extend the DCA complaint handling pause as it stated it had taken “longer than expected” to get the data from firms.
The FCA explained: “We will set out next steps in our review into the past use of DCAs in May 2025.
“By then, we expect to have completed our analysis and assessed the outcome of the Barclays judicial review and other relevant cases in the Court of Appeal.
“The extended pause allows us time, if necessary, to introduce an alternative way of dealing with DCA complaints, such as a consumer redress scheme.”
The regulator did note that it “is too early to say if we will intervene in this way, but based on our work so far, it is more likely than when we started our review”.
However, the extension will mean that firms have longer to deal with DCA complaints issued by drivers with the hope that more motorists get compensation.
The FCA has also confirmed that consumers will have until the later date of July 29, 2026, or 15 months from the date of their final response letter from the firm, to refer a DCA complaint to the Financial Ombudsman.
This is more than the usual six-month timescale meaning consumers will not have to decide whether to refer their complaint to the Financial Ombudsman before the FCA announce next steps.
Martin Lewis from the Money Saving Expert website shared on social media site X that it was “clearly disappointing” for drivers waiting for payouts.
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The DCA practice has been banned by the FCA since 2021
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He said: “The most important thing people can do is log their complaint asap, so that if there is a time bar, hopefully there’s less chance of it being ruled out of time.”
The selling practice was banned in 2021 after it was found that some brokers adjusted the interest rates purposefully to charge customers more so they could receive the difference in commission.
The FCA detailed that it introduced the pause to prevent “disorderly, inconsistent and inefficient outcomes” for consumers and knock-on effects on firms and the market.
