How to complain about a commission arrangement on a car finance loan

The Financial Conduct Authority (FCA) is reviewing historical commission arrangements with car finance contracts, as some car finance customers may have been charged too much on their loans.

This could have happened where lenders allowed brokers (eg car dealers) to alter the interest rates they offered to customers for car finance. 

In some cases, the higher the interest rate, the more commission the broker received – this is called a discretionary commission arrangement (DCA). The practice of DCAs was banned in 2021.

The FCA has put a temporary freeze on complaint handling times. Instead of the usual eight-week limit, firms do not have to respond before 4 December 2025. 

It has also extended the limit for consumers to take a complaint to the Financial Ombudsman Service (FOS) from six months to 15 months after receiving a final response from the provider.

However, the regulator is encouraging companies to continue to handle complaints in the meantime. 

• Use our free letter to find out if you had a DCA and make a complaint

Am I eligible to complain?

If you used finance to buy a vehicle before 28 January 2021 then it's likely there was a commission arrangement on your deal.

You may be eligible to make a complaint about a DCA if:

• you used car finance to buy a car before 28 January 2021. This includes conditional sale agreements and fixed-sum loan agreements (including hire purchase and personal contract purchase, but not personal contract hire).
• Your lender and broker used a discretionary commission arrangement.

This doesn’t apply to:

• Car finance arrangements made on or after 28 January 2021.
• Hire agreements, such as personal contract hire.

What is the process?

The FCA advises that you should make a formal complaint to your finance provider if you think you may be affected. If you have already complained, you do not need to do anything.

The FCA is still conducting its review. Once it is completed, it will decide the best way to compensate consumers who have been treated unfairly (for example, it may set up a formal redress scheme). The FCA has committed to an 'easy to participate in' redress scheme and its proposal for the scheme will be published later in 2025.

Generally, you need to complain to your provider within six years of the problem happening. Or, if later, within three years from when you should have become aware that you had cause to complain. However, this may not be clear cut – so if you think you could be running out of time, you should consider complaining to your provider now.

The FCA has said that most individuals will be paid less than £950 in compensation, and the first payments will be made in early 2026.

• Find out more: everything you need to know about car finance mis-selling

How to complain

To make a complaint, you will need to find out who your arrangement was with. Then you can use our free template letter to complain about a discretionary arrangement. 

You may not know whether there was a DCA in relation to your finance agreement, so our template letter asks this question first. 

The letter asks the recipient to treat your request for information as a subject access request (SAR) if it can’t provide the information you are asking for. An SAR is a written or verbal request to a company or organisation asking for access to the personal information it holds on you. It is usually a free service, but occasionally a company may charge a small fee for processing and sending the information. We can’t guarantee that this approach will achieve the desired result, but we think it’s worth a try.