Complaints about hidden commission in car finance

In October 2024, complaints about undisclosed commission were taken to the Court of Appeal. The judge ruled that customers should have been given all the details on any type of commission in car finance agreements.

This means that many car finance deals could have been mis-sold.

The case will next be taken to the Supreme Court, which will make a final judgment to decide if customers will be due compensation. This could be as late as Spring 2025. 

This issue is separate, but related to, an investigation into car finance deals that included a specific type of commission called a “discretionary commission arrangement” (DCA).  

The FCA were originally investigating car finance deals with DCAs. If your agreement was from before January 2021 and had a DCA, there’s a better chance you’ll get compensation by complaining on this basis.

If you think you might have bought your vehicle with a DCA agreement you can put in a complaint now. Find out more about How to complain about mis-sold DCAs in car finance.

You could be due compensation if:

• you took out motor finance between April 2007 and October 2024 (including cars, vans, campervans and motorbikes)

• your agreement was a Personal Contract Purchase (PCP), Hire Purchase (HP) or Personal Contract Hire (PCH, often called a lease)

• your vehicle was bought for personal use 

• your agreement included a commission arrangement that wasn’t explained to you fully.

You might have seen adverts for companies who can complain on your behalf. These companies normally take a large cut of any compensation – up to 30%. 

If possible, handle the complaint yourself so that any compensation goes straight to you. You can use a free complaint template to help.

It might seem daunting but it’s a simple process that could save you £100s. A claims management company won’t be any quicker or do anything you can’t do yourself.

Gather any information about your car finance. Then complain to your lender, ideally in writing.  

You’ll need to complain to the firm you were paying each month. If you’re not sure who that is, you can check your credit report (if the agreement was active in the past six years) or old bank statements if you have them. 

Tell the lender you think you’ve been charged hidden commission and include as much information as you have. You can find a free template for complaintsOpens in a new window on MoneySavingExpert.

You should get a response from the lender to confirm that they’ve received your complaint within a few weeks. If you don’t hear anything, contact the firm again to check if they received it. 

Your lender should confirm whether you had a commission arrangement. However, the FCA has given firms extra time to respond to complaints, so you might not hear back for a while.

What you do next depends on the response you get:

• If you had a commission arrangement, you don’t need to do anything more for now. When the Supreme Court makes its decision on hidden commissions, customers will be given details on what they need to do next. 

• If you didn’t have a commission arrangement or it was fully disclosed, unfortunately it’s unlikely that you’ll be due any compensation. If you disagree, you can take your complaint to the Financial Ombudsman ServiceOpens in a new window

• If your lender doesn’t give you any further response, don’t worry. As long as your complaint has been acknowledged, you’ll be able to take the next steps once the Supreme Court has made its decision.

If you don’t get any response at all, or you disagree with the lender’s response, you can take your complaint to the free Financial Ombudsman ServiceOpens in a new window

It all depends on the Supreme Court decision. The case is likely to be heard before 16 April, but a final decision could be made as late as Spring 2025.

If compensation is due, the FCA will set out the guidelines for how people should complain and what they’ll get. 

This means that once your complaint is logged, the next step is to simply wait and see what happens.