On 11 January 2024, the Financial Conduct Authority (FCA) announced a review of the vehicle finance market. This was due to the high number of customer complaints about discretionary commission arrangements, which were banned in January 2021.
This announcement extended the time we have to respond to complaints about discretionary commission arrangements. The FCA’s review is market-wide and affects all providers of vehicle finance.
Following this, a judgment was issued by the Court of Appeal on 25 October 2024 in relation to a case we were involved in. This decision changed the legal standard needed for lenders like us to make customers aware of commission payments related to their motor vehicle finance.
On 22 November 2024, we submitted an application for permission to appeal this Court of Appeal judgment. On 11 December 2024, we were informed that permission to appeal had been granted by the Supreme Court.
On 19 December 2024, the FCA announced that they are extending the time that motor finance lenders have to respond to complaints about any commission payments linked to motor finance. This extension will last until 4 December 2025.
The information below will give you more information and help you decide what you should do if you’re contacted by a customer, the Financial Conduct Authority (FCA), the Financial Ombudsman Service (FOS) or a Claims Management Company (CMC).
If their agreement was taken out before 28 January 2021, there may have been a discretionary commission arrangement (DCA) in place.
If their vehicle finance agreement started after this date, we may have paid a different type of commission. This is known as a ‘non-discretionary commission arrangement’ or non-DCA.
We provide finance for cars, vans, motorcycles and leisure vehicles (like motorhomes). All these types of vehicles are covered by the review.
This applies to both new and used vehicles.
The FCA’s review covers Hire Purchase, Personal Contract Purchase (PCP) and Conditional Sale.
This applies to consumers, sole traders, and partnerships. If your customer is a limited company or LLP and they’ve taken out finance with us, they aren’t impacted by this review.
Customers in Northern Ireland are treated in exactly the same way as customers in England, Scotland and Wales, which means the announcement does apply to them.
No. There is a different regulator with separate regulations in Ireland and that means they are not impacted by this announcement.
On 11 January 2024, the FCA introduced a record retention rule in their handbook (DISP 5.3). Lenders and credit brokers (such as dealers and brokers), must retain and preserve the following (whether in paper or electronic format):
The FCA now require that you do not delete, or dispose of records relating to regulated motor finance agreements where there was a commission arrangement in place between us, if this information is or could be relevant to handling future complaints or claims.
This requirement is in force until 11 April 2026.
You can find more information about how you should process customer data in our Dealer and Broker Conduct Guide, which can be found here
If you’re contacted by the FOS, for example to complete a Motor finance commission: Business response form, it’s likely that one of your customers has complained to the FOS about vehicle finance commission. You should respond with the information requested at your earliest convenience, and within any timescales the FOS sets out.
If you receive a ‘letter before action’ from a CMC, it’s important you do not ignore this communication. If you need support, we recommend you seek your own legal advice. We would also be grateful if you could forward us a copy of the ‘letter before action’ for our records.
At this stage, we can’t comment on any potential compensation customers may be entitled to. What we do know is that on 11 January 2024, the FCA announced that they’re going to undertake review work in the motor finance market and on 19 December 2024 they broadened the scope of their complaints pause connected with this review.
The FCA are planning to announce the outcome of their review in May 2025, giving lenders until 4 December 2025 to implement any changes, such as a compensation scheme.
You can find out more about the FCA’s work on their website, which is fca.org.uk/.
Ask them to visit this page on our website and follow the steps to check their details and complain about commission. Our online form is the quickest way to make a complaint about commission linked to their vehicle.
Ask them to visit this page on our website and complete our online form with as much information as they do have.
To be able to confidently match a customer’s complaint with a historical finance agreement, we need the following information:
If we can confirm that the customer had an agreement with us which included commission, we’ll automatically log a complaint for them.
Normally, we must provide a response within 8 weeks, or let the customer know that we need longer.
While they carry out their review, the FCA have put in place a pause in responding to all customer complaints about motor vehicle finance commissions.
The pause is currently due to end 4 December 2025.
No. There are no changes to how and when we must respond to all other types of complaints. The changes only relate to commission complaints.
Information on the FCA’s review and the temporary measures they’ve put in place.
Summary of criteria for customers making a complaint about commission, and the additional support they provide.
Further detail for firms affected by the FCA’s review.
Customers can find out more information and decide whether to raise a complaint with us if they think they’ve been affected.