Vehicle finance discretionary commission complaints
The Financial Conduct Authority says some customers may have been charged too much on their vehicle finance before 2021.
Get support with commission complaintsOn 11 January 2024, the Financial Conduct Authority (FCA) announced that they’re going to undertake a review in the vehicle finance market.
The FCA’s review is due to the high number of customer complaints about discretionary commission arrangements, which the FCA banned in January 2021. This work is market-wide and affects all providers of vehicle finance that had discretionary commission arrangements in place.
If you think you might have been affected, the information below will give you more information and help you decide what you should do next.
Updates following FCA announcement – 13 November 2024
The FCA is consulting with the finance industry to decide whether to extend the time we have to respond to complaints about any commission payments linked to motor finance.
What you should know:
This announcement followed a judgment by the Court of Appeal on 25 October 2024 which changed the legal standard needed for lenders like us to make customers aware of commission payments related to their finance. Close Brothers disagrees with the Court’s extension of the existing case law in this area, and we are currently seeking permission to appeal this to the UK Supreme Court.
STEP 1
Check your details to make a complaint about a potential discretionary commission arrangement
If you took out vehicle finance on a regulated agreement before 28 January 2021 you may be able to make a discretionary commission arrangement complaint.
Enquire online
Our online form is the quickest way to find out if you had a discretionary commission arrangement for your motor finance, and to make a complaint. It takes less than 5 minutes to complete. Once you’ve submitted your enquiry, you’ll get an email receipt.
For other types of complaint, or if you’re making an enquiry on behalf of someone else, contact our complaints team.
STEP 2
Our specialist complaints team will review your enquiry
We'll check your details to see if you have had motor finance with us. If we find you had a discretionary commission arrangement, we'll raise a complaint for you.
STEP 3
We’ll be in touch once the FCA have completed their industry wide review on discretionary commission arrangements
While they carry out their review, the FCA have put in place a pause in responding to customers complaints about discretionary commissions arrangements. This will ensure complaints are dealt with fairly by all vehicle finance lenders.
The pause is currently due to end 4 December 2025.
The outcome of the FCA’s review will decide if we need to take any action on these complaints, such as customer compensation.
If your agreement was taken out before 28 January 2021, there may have been a discretionary commission arrangement in place.
On 28 January 2021, the FCA banned all discretionary commission arrangements. As a result, the work the FCA is going to undertake only looks at agreements that started before 28 January 2021.
We provide finance for cars, vans, motorcycles and leisure vehicles (like motorhomes). All these types of vehicles are covered by the review.
Both new and used vehicles which were financed prior to 28 January 2021.
Our current understanding is no. The FCA’s review covers Hire Purchase, PCP and Conditional Sale.
Our current understanding is it’s regulated agreements only, but we can confirm when we receive the outcome of the 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 different regulations in Ireland and that means they are not impacted by this announcement.
At this stage, we can’t comment on any potential compensation customers may be entitled to. What we do know is on 11 January 2024, the FCA announced that they’re going to undertake work in the motor finance market.
This is due to the high number of complaints coming from customers regarding discretionary commission arrangements (DCAs) which existed prior to changes introduced by the FCA in 2021.
This work is market-wide and affects all providers of vehicle finance.
You can find out more about the FCA’s work on their website, which is https://www.fca.org.uk/consumers/car-finance-complaints
Normally, we must provide a response to your complaint within eight weeks, or let you know that we need longer.
The FCA paused the requirement to respond to discretionary commission arrangement complaints while they undertake their review and decide what action, if any, will be required by firms for these complaints.
The pause is currently due to end 4 December 2025.
If you submit a relevant complaint, you’ll have to wait until after the pause has ended for a final response. The FCA has taken this step to ensure complaints are dealt with consistently by all motor finance providers.
This pause is limited to only discretionary commission arrangement complaints. There are no changes to the timescales in place for all other complaints.
We’re sorry for the delay. We’re currently dealing with a high volume of enquiries about discretionary commission arrangements, and we’re checking each case thoroughly. It may take us longer than usual to respond to some customers.
If you received your final response letter between 12 July 2023 and 10 January 2024, you now have the right to refer your complaint to the Financial Ombudsman Service (FOS), free of charge up until 29 July 2026. This is an extension to the usual six months which the FCA have introduced to allow them time to complete their review into the historical use of discretionary commission arrangements in the motor finance industry.
For information on the service the Ombudsman provides can be found here.
Our automated process for matching and verifying the identity of our customers compares the information you submit against data held in our systems at the point your agreement ended. If the information you provide doesn’t match our records, we won’t be able to find your agreement.
Common reasons for this include:
To be able to confidently match your complaint with a historical finance agreement we need the following information:
The pause is currently due to end 4 December 2025. This is to give the FCA enough time to analyse the data they’re collecting from vehicle finance lenders and to assess the outcome of a judicial review of the Financial Ombudsman’s decision to uphold a discretionary commission arrangement complaint. The FCA’s next steps could involve consulting on a customer compensation scheme which will take time to plan for and carry out.
Information on the FCA’s review of discretionary commission arrangements and the temporary measures they’ve put in place.
Summary of criteria for customers making a complaint about commission paid to dealers, and the additional support they provide.
For more information on our complaints handling procedures for discretionary commission arrangements you can download a copy of our complaints policy.