Motor Finance Agreements
If you have/had motor finance on a personal PCP or Hire Purchase agreement you should contact your finance company. You can ask them to confirm if there was discretionary commission within your agreement and complain.
Are You A Victim of Mis-Sold Finance?
Have you purchased a car, van, bike, camper van,(between 2007 & 2021) or a caravan, boat or double glazing after 2007 on PCP or Hire Purchase?
You Could Be Owed Compensation
Am I Eligible?
Have you purchased a car, van, bike, camper van, (between 2007 & 2021) or a caravan, boat or double glazing after 2007?
Did you secure finance from the company who sold you the product? (For example:- Car Dealership).
If a vehicle did you utilise PCP or Hire Purchase?
If you answered YES to the above you may be due compensation.
Hidden Broker Commissions
Often a discretionary commission was applied to your finance agreement. A discretionary commission arrangement (DCA) is a hidden commission agreed between your finance company and credit brokers which incentivised them to charge customers more interest than the lender required and make higher profits.
The FCA (Financial Conduct Authority) estimates that on a typical 4-year motor finance agreement of £10,000, the broker commission under a discretionary commission arrangement could result in customers paying around £1,100 in interest charges.
Financial Conduct Authority (FCA) Investigations
The FCA banned discretionary commission in 2021, to remove the incentive for credit brokers to increase the interest rate that a customer pays for their motor finance.
In 2024 the FCA started to investigate motor finance discretionary commission arrangements and instigated a pause on complaint handling up until September 2024. Car finance complaints | FCA
In July 2024 the FCA extended the complaint handling pause until December 2025 and implied they were considering a Section 166 (S166).
A Section 166 is where the FCA can get firms to investigate all previous sales of a product and take appropriate action including advising firms to give compensation if they believe there has been widespread mis-selling.
What’s Next?
The next key step is May 2025 in where the FCA will either:
Tell firms to respond to complaints in the usual way. The complaint handling pause will end.
The FCA will introduce a different approach to dealing with complaints as explained above. If the FCA chooses this option the complaint handling pause will continue until December 2025.
Important – This investigation is only in relation to motor finance agreements
widespread mis-selling investigation
Subject to the FCA finding widespread mis-selling in its investigation we believe that other areas where discretionary commission arrangements have been used such as caravans, boats and double glazing will also come under scrutiny.
How to complain?
You can raise a complaint yourself now. We believe the FCA motor finance investigation outcome maybe beneficial to all discretionary commission complaints in the future.
