Frequently Asked Questions

WHAT IS MOTOR FINANCE COMMISSION?

When a dealer or broker arranged motor finance for a customer, the lender may have paid them commission for arranging the finance.

There were different ways this commission could be calculated.

The FCA’s compensation scheme looks at certain commission arrangements and whether customers were given enough information about them when they took out their finance.

WHAT IS A DISCRETIONARY COMMISSION ARRANGEMENT (DCA)?

Before 28 January 2021, some lenders allowed brokers (such as car dealers) to set the interest rate given to customers on car finance.

The broker’s commission depended on the rate, and higher interest rates sometimes meant higher commission. This is known as a Discretionary Commission Arrangement. The FCA banned this practice in 2021.

WHAT IS A NON-DISCRETIONARY COMMISSION ARRANGEMENT (Non-DCA)?

A Non-Discretionary Commission Arrangement is a fixed commission. The broker or dealer cannot change the interest rate you pay.

Commission may be a fixed amount or a percentage of the amount borrowed and is set in advance by the lender.

DOES THE FACT THAT COMMISSION WAS PAID MEAN I’LL RECEIVE COMPENSATION?

No.

Commission was commonly paid when motor finance was arranged and the fact that commission was paid doesn’t automatically mean you were treated unfairly or that compensation is due.

The FCA has set rules that lenders must use to decide whether an agreement is eligible for compensation.

HOW DO I KNOW IF MY AGREEMENT MAY BE COVERED BY THE SCHEME?

You may be covered if:

you took out motor finance between 6 April 2007 and 1 November 2024;
your agreement was a type covered by the scheme, such as Hire Purchase (HP) or Personal Contract Purchase (PCP); and
certain commission arrangements applied and you weren’t given the information required about them.

There are also some circumstances where an agreement isn’t covered. We’ll consider the details of your agreement against the FCA’s rules, so you don’t need to work this out yourself before contacting us.

ARE PCP AND HP AGREEMENTS COVERED?

Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements may be covered if they meet the FCA’s eligibility criteria and were entered into between 6 April 2007 and 1 November 2024.

Being within these dates doesn’t automatically mean compensation is due. We’ll assess each relevant agreement against the FCA’s rules.

WHAT TYPES OF COMMISSION ARRANGEMENTS COULD BE COVERED BY THE SCHEME?

The FCA’s scheme considers certain arrangements that weren’t properly disclosed to customers. These include:

Discretionary Commission Arrangements (DCA) – where the broker could adjust the interest rate and this could affect the commission they received.

High commission arrangements – where the commission was at least 10% of the amount borrowed and at least 39% of the total cost of credit.

Certain contractual ties – for example, where a broker only used one lender or gave one lender the first opportunity to provide the finance. There are exceptions to this, including certain circumstances where there were clear links between the lender, manufacturer and franchised dealer.

You don’t need to know which type of arrangement applied to your agreement. We’ll check the information we hold when we review your complaint.

IS PERSONAL CONTRACT HIRE (PCH) COVERED?

No. Personal Contract Hire (PCH), sometimes referred to as leasing, isn’t included in the FCA’s Motor Finance Compensation Scheme.

If you have made a complaint about commission relating to a PCH agreement, we’ll consider it through our usual complaints process where appropriate.

DOES THE SCHEME APPLY TO NEW AND USED VEHICLES?

Yes, this applies to both new and used vehicles.

WHAT HAPPENS FOLLOWING THE SUPREME COURT JUDGMENT IF I HAVE ALREADY MADE A COMMISSION RELATED COMPLAINT?

If you have previously submitted a complaint to us, you do not need to take any action at this time. We will provide further updates on this page in line with updates provided by the FCA.

MY FINANCE AGREEMENT HAS ALREADY ENDED. CAN IT STILL BE COVERED BY THE SCHEME?

Yes. Your agreement doesn’t need to be active now.

If your agreement was entered into during the relevant period and meets the FCA’s other eligibility criteria, it may still be covered.

I NO LONGER OWN THE VEHICLE. CAN I STILL BE COVERED BY THE SCHEME?

Yes. You don’t need to still own the vehicle.

Eligibility is based on your finance agreement and the circumstances when it was arranged.

I HAD MORE THAN ONE REDLINE FINANCE AGREEMENT. WILL YOU CONSIDER THEM ALL?

Each finance agreement is considered separately because different commission arrangements or eligibility rules may apply.

Please provide as much information as you can about the agreements you want us to look at. We’ll use the information available to us to identify and review the relevant agreements.

WHEN WILL I RECEIVE A DECISION?

This will depend on your individual circumstances and the outcome of the legal challenge to the FCA’s scheme.

Until the legal process has ended, lenders don’t need to calculate or pay compensation to customers who may be eligible.

Some parts of the scheme haven’t been suspended. This means we may be able to tell some customers that their agreement isn’t eligible for compensation before the legal challenge has ended.

If we’re able to give you an outcome, we’ll contact you and explain our decision.

We’ll update this page when the FCA provides further information about the timetable.

WHAT IS A HIGH-VALUE LOAN AND IS IT COVERED BY THE SCHEME?

High-value loans are agreements where the loan value exceeds the threshold for the year in which your agreement was entered into, as set out in the table below.

Such agreements are not covered by the Scheme. However, agreements used to purchase vehicles modified for accessibility purposes remain in the Scheme regardless of loan value.

Year	Total amount of credit
2007 (See Note )	N/A
2008 (See Note )	£38,000
2009	£39,000
2010	£43,000
2011	£45,000
2012	£47,000
2013	£51,000
2014	£56,000
2015	£60,000
2016	£61,000
2017	£65,000
2018	£68,000
2019	£70,000
2020	£73,000
2021	£75,000
2022	£80,000
2023	£82,000
2024	£82,000

Please note, that if your agreement started before 6 April 2008 and the amount of credit amount was more than £25,000, it is not covered by the Scheme. This is because agreements like this were not classed as regulated motor finance agreements at that time.

You can still make a complaint to us, which we’ll consider under the usual complaints handling rules.

WHAT CAN I DO IF I DON’T AGREE WITH YOUR DECISION?

If we tell you in our provisional decision that your agreement isn’t eligible for compensation and you believe we’ve made a mistake, please contact us within 1 month and ask us to review our decision.

If you’re still unhappy after we’ve reviewed it and have sent you a redress determination letter, you may be able to ask the Financial Ombudsman Service to consider your complaint.

The Financial Ombudsman Service is free to use.

We’ll explain your rights and any relevant time limits in the communication we send you.

WHY HAVEN’T YOU BEEN ABLE TO FIND MY AGREEMENT WITH THE INFORMATION I SUBMITTED?

We may not be able to find your agreement if:

You’ve moved house or changed your name.
The agreement is more than six years old.
The information provided by you does not match our records.

To help us find your agreement, please provide:

Agreement number or vehicle registration.
Date of birth.
Full name (as at the end of the agreement).
Address and postcode (as at the end of the agreement).

I HAVE SIGNED UP TO A CLAIMS MANAGEMENT COMPANY REGARDING MY COMMISSION COMPLAINT. HOW DO I WITHDRAW AND REGISTER A COMPLAINT DIRECTLY WITH YOU?

You should check your contract with the claims management company to see what it says about termination and your right to withdraw from the agreement. We will continue to correspond with the claims management company you have instructed until we receive confirmation from them that you have terminated your agreement with them. Once we receive this, we will update our records and contact you directly.