On 4 February 2026, the Financial Conduct Authority (“FCA”) issued a Dear Chief Executive Officer (“Dear CEO”) letter to motor finance lenders outlining its expectations and required actions to address emerging risks of consumer harm arising from multiple professional representatives acting on the same motor finance complaint. The letter builds on supervisory concerns and follows the FCA’s ongoing engagement with firms handling complaints linked to alleged commission misselling in the motor finance sector.
Background:
Motor finance commission complaints have seen a surge in activity as consumers lodge grievances about alleged undisclosed commissions and unfair practices in vehicle financing arrangements. The FCA has identified instances where a single complainant has appointed more than one professional representative (“PR”), including claims management companies and law firms, for the same complaint.
These PRs lack clear coordination or disclosure between parties, resulting in inefficiencies and confusion about who is truly acting on behalf of a consumer.
The FCA’s concerns are heightened by the imminent end of the complaints handling pause scheduled for May 2026. The pause was introduced to ensure a coordinated resolution approach and undertake policy development, including a proposed Motor Finance Consumer Redress Scheme.
Identifying the Problem:
The FCA’s letter emphasises that where multiple representatives are involved, lenders and representatives have a shared responsibility to ensure clarity on who is authorised to act for the consumer.
Unidentified, duplicate representation may:
- Delay progress on complaints when it is unclear who the complainant’s chosen representative is;
- Lead to consumers incurring multiple or unnecessary termination fees as they attempt to change representatives or exit agreements; and
- Increase operational burdens on both lenders and representatives, unnecessarily prolonging complaint resolution.
These concerns are closely linked to firms’ obligations under the FCA’s Dispute Resolution: Complaints (“DISP”) rules, which require firms to handle complaints promptly, fairly and consistently.
FCA’s Expectations of Lenders:
The FCA set out a series of practical steps that motor finance lenders should take where they identify more than one professional representative for the same complaint. These include:
- Identifying All Relevant Representatives: Lenders should contact each PR linked to a complaint, explain the multiple representation issue and copy correspondence to the customer.
- Clarifying Sole Representation: Firms should provide sufficient information to all representatives and the consumer to establish a clear agreement on who is acting as the sole representative.
- Supporting Constructive Engagement: Lenders should encourage constructive communication to resolve duplication complaints efficiently and help consumers understand the consequences of having multiple representatives, including potential fees.
- Closing duplicate Complaints: Once the sole representative is confirmed, lenders should inform all parties to close duplicate complaint files to ensure efficient handling.
- Seeking Customer Direction: Where reasonable efforts to determine sole representation are unsuccessful, lenders should ask the consumer how they wish to proceed.
Throughout this process, lenders must ensure compliance with all applicable legal and data-protection requirements when sharing information.
Collaboration and Monitoring:
The FCA’s letter also refers to a joint statement issued with the Solicitors Regulation Authority (“SRA”), emphasising that both regulators expect PRs to adopt robust onboarding practices to confirm whether a consumer is already represented before entering into a new engagement.
Professional representatives are expected to work collaboratively to avoid duplicate complaints and resolve existing multiple-representation situations.
The FCA has indicated that it will monitor how firms manage this issue and may intervene where poor practices or unnecessary delays are identified.
Implications:
For motor finance lenders and PRs, the letter highlights several areas of priority for enhancing governance and complaint handling practices:
- Improved Due Diligence at Onboarding:
Representatives must ensure they verify existing information before accepting new clients to prevent duplication of complaints. Due diligence and screening at onboarding is essential to prevent delays and increased risk of potential harm to complainants.
- Clear Communication with Consumers:
Both lenders and representatives should ensure that consumers understand who is acting on their behalf and the implications of appointing or switching representatives. Having transparent information on the complaints process and the role of the PRs is key to maintaining clear client communication.
- Fair Handling of Termination Fees:
Where consumers seek to terminate representation, any fees charged should be reasonable, transparent, and proportionate to the work done. Firms should take steps to ensure that consumers are not placed at increased risk of termination fees.
Next Steps:
With the motor finance complaints pause ending in May 2026 and the FCA expecting to publish final rules for a motor finance redress scheme by the end of March 2026, firms must act now to ensure complaints are progressed efficiently and in line with regulatory expectations. The FCA’s proactive stance signals its intention to hold industry participants to account for delays, poor communication, or practices that harm consumer outcomes.
How can Complyport Help:
The FCA’s recent Dear CEO letter on motor finance commission complaints and multiple representation issues reinforce the regulatory expectations on lenders and professional representatives, particularly in relation to complaints governance, consumer protection and operational controls. Complyport supports firms in strengthening their frameworks and mitigating regulatory risk through the following services:
- Consumer Duty Outcome Testing: embedding measurable consumer outcome metrics within complaints governance and MI reporting;
- Complaints Handling Framework Reviews: independent assessments of DISP compliance, multiple representation processes and escalation controls;
- Outsourcing Reviews: strengthening governance over outsource complaint handlers and professional representative interactions; and
- SMCR Support: assisting with governance documentation, regulatory attestations and board-level reporting.
Contact us today to book a meeting with one of our Subject Matter Experts and ensure your firm is fully prepared for the UK’s crypto regulatory future.
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