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Financial services - rules affecting the car finance sector (UK)

The UK Financial Conduct Authority announced a review in January 2024 over the use of discretionary commission arrangements in car finance prior to its 2021 ban. The regulator also allowed firms not to deal with DCA-related complaints until December 2025. Meanwhile, Barclays has initiated a judicial review after the Financial Ombudsman Service had mistreated a costumer by paying a commission to a car finance broker without disclosing such arrangement. On Oct. 25, 2024, the Court of Appeal ruled that it is unlawful for lenders to pay commissions to brokers in the context of car finance arrangements. The two lenders involved in the case intend to appeal. The industry now faces uncertainty as it sees new rules that are not included in the FCA rulebook.

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