Claim a refund for a mis-sold PCP car finance deal (discretionary commission)
Until the FCA banned them on 28 January 2021, many car dealers and brokers could set the interest rate on your PCP (Personal Contract Purchase) finance themselves. The higher the rate they put you on, the more commission the lender paid them, a 'discretionary commission arrangement' (DCA). This was often not explained to you, which means you may have paid more interest than you should have. The FCA has now confirmed an industry-wide redress scheme, and you can complain directly to your lender for free and keep 100% of any payout. You never need a claims firm taking a cut.
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Under the Consumer Credit Act 1974, an undisclosed or inadequately disclosed commission can make the credit relationship 'unfair' to you (sections 140A-140C). Following the Supreme Court's 1 August 2025 judgment in Johnson v FirstRand ([2025] UKSC 33) and the FCA's policy statement PS26/3 (published 30 March 2026), the FCA is running a consumer redress scheme covering motor finance agreements taken out between 6 April 2007 and 1 November 2024 where commission was not properly disclosed. The pause on complaint handling lifts on 31 May 2026. If your lender rejects your complaint, you can escalate for free to the Financial Ombudsman Service (FOS).
Step by step
- 1Dig out your finance paperwork: the agreement, dealer/broker name, lender name, the APR, and the dates. Check it was a PCP (or any car finance) taken out between 6 April 2007 and 1 November 2024.
- 2Send a written complaint directly to the lender (the finance company named on your agreement, not the dealer), stating you believe a discretionary commission arrangement was not disclosed and made your relationship unfair under sections 140A-140C of the Consumer Credit Act 1974.
- 3Ask the lender to confirm whether a DCA applied, the commission amount, and to refund the extra interest plus compensatory interest under the FCA redress scheme. Keep copies of everything and note the date you complained.
- 4If the lender rejects you or does not resolve it within the time allowed, refer the complaint to the Financial Ombudsman Service for free, normally within six months of their final response.
What they'll say, and your comeback
“Commission arrangements were standard industry practice and perfectly legal at the time.”
Comeback, Legality is not the test. Under sections 140A-140C of the Consumer Credit Act 1974 the question is whether the relationship was unfair to me, and an undisclosed discretionary commission that inflated my interest rate can make it unfair, as the Supreme Court confirmed in Johnson v FirstRand and the FCA has reflected in its redress scheme.
“The commission was disclosed in your paperwork, so there is nothing to refund.”
Comeback, A generic line buried in the small print is not adequate disclosure of a discretionary commission arrangement. Please send me the specific document and wording you are relying on, and the actual commission figure, so I can assess it against the FCA's standards.
“Your agreement is too old to complain about.”
Comeback, The FCA redress scheme covers agreements taken out from 6 April 2007 onwards, and time limits can take account of when I could reasonably have known about the commission. Please treat this as a valid complaint under the scheme.
FAQ
Do I need a claims management company or solicitor?
No. The FCA is clear you can complain for free, directly to your lender and then the Financial Ombudsman. A claims firm can take a sizeable cut of your payout for work you can easily do yourself.
How much might I get back?
It depends on your loan, the rate and the commission paid. The FCA estimates an average of around £830 per agreement under the finalised scheme, though high-commission cases can be worth more. You receive a refund of the extra you were charged plus compensatory interest.
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A self-serve tool, not a law firm. General information, not legal advice.