On October 25, 2024, the Court of Appeal delivered a pivotal decision on motor finance commission disclosures, siding with consumers in all cases reviewed. Close Brothers Group plc has indicated plans to appeal this ruling to the UK Supreme Court. However, this Court of Appeal decision may significantly influence the FCA's direction in regards to the regulations around commission disclosures.
The ruling sets a new transparency standard in the sector that goes beyond the Financial Conduct Authority’s (FCA) current rules, which do not require mandatory commission disclosures by credit brokers. This means the regulations within CONC 4.5 are arguably not sufficient enough to protect consumers and written consent should be sought after disclosures have been made about the amount of commission being paid.
PPL can support firms with reviews of their commission arrangements, remuneration policies, and have a motor finance compliance platform that can help minimise any associated risks.
If you have concerns, give the Product Partnerships team a call, we will be publishing a series of articles to support firms as this unfolds.