Mis-sold Car Finance? You Could Be Owed £1,000s
If you took out a PCP or HP car finance agreement before January 2021, a hidden dealer commission arrangement may have caused you to pay a higher interest rate without your knowledge. The FCA is reviewing past agreements and redress could be significant. We draft your complaint letter — completely free.
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This is a free guide, not legal or financial advice, and not a guarantee of compensation.
What Is the Car Finance Scandal?
The FCA Is Reviewing Millions of Car Finance Agreements
The Financial Conduct Authority (FCA) has launched a major review into discretionary commission arrangements (DCAs) in the car finance market. Lenders and brokers may be required to pay redress to consumers who were overcharged. The FCA is expected to announce its findings and next steps in 2025.
Between roughly 2007 and 28 January 2021, many car dealers and brokers had the ability to set — or "flex" — the interest rate on a customer's PCP or HP finance agreement. The higher the rate they set, the more commission they earned from the lender. This arrangement is known as a discretionary commission arrangement (DCA).
The problem: in most cases, the customer was never told that the dealer stood to earn more money by giving them a worse deal. This conflict of interest was rarely, if ever, disclosed. As a result, millions of consumers may have paid significantly more interest than they needed to — without their knowledge or meaningful consent.
The FCA banned DCAs on 28 January 2021 precisely because of this harm. It is now reviewing past agreements to assess whether a wider redress scheme is needed. The Supreme Court is also considering related cases that could clarify the legal position and the scale of any compensation owed.
You do not need to wait for a formal scheme to be announced. You can submit a complaint to your lender now, and if they reject it, escalate to the Financial Ombudsman Service (FOS). We draft that complaint for you, free of charge.
Am I Likely Affected?
You may have grounds for a complaint if most or all of the following apply to your situation:
- You purchased or leased a car using PCP (Personal Contract Purchase) or HP (Hire Purchase) finance.
- The finance agreement was arranged before 28 January 2021 — the date the FCA banned DCAs.
- The agreement was arranged through a car dealer or broker rather than directly with a bank.
- You were not clearly told at the time that the dealer or broker could earn more commission by setting a higher interest rate.
- You are still within the relevant time limits: generally 6 years from the date of the agreement in England and Wales, or 3 years from when you became aware of the issue if that is later.
If you are unsure, complete our free assessment and we will review your details. You do not need to have paperwork to hand — we can help you identify the lender and the basis of your complaint.
Signs Your Car Finance May Have Been Mis-sold
Any one of these warning signs may indicate that you were not given a fair deal on your car finance agreement.
You Were Not Told About Commission
The dealer or broker did not explain that they received commission from the lender, let alone that their commission was linked to the interest rate they set on your agreement. Under FCA rules and the Consumer Credit Act 1974 s.140A, this lack of disclosure can give rise to an unfair relationship claim.
You Paid a Higher APR Than Expected
If the APR on your agreement seemed high relative to your credit score and circumstances, or if you were quoted a lower rate during negotiation and then presented with a different figure on the paperwork, a DCA may have inflated your rate to maximise the dealer's commission.
You Felt Pressured at the Dealership
Finance discussions at dealerships were often rushed, with paperwork presented at the end of a lengthy sales process when it was difficult to walk away. Pressure selling that prevented you from making a free and informed choice can support a complaint of unfair conduct under the FCA's Consumer Duty and earlier Conduct of Business rules.
No Affordability Check Was Carried Out
FCA CONC rules require lenders to assess whether a borrower can afford the repayments before approving credit. If you were not asked about your income, outgoings, or existing debts, the lender may have failed its creditworthiness obligations — supporting an unfair relationship argument under s.140A CCA 1974.
The Finance Terms Were Not Explained Clearly
PCP products in particular are complex: balloon payments, optional final payments, excess mileage charges, and total amounts payable are not always made clear. Failure to explain key terms adequately may breach the FCA's information disclosure requirements and the CCA's pre-contract information rules.
The Agreement Was With a Major Lender
Lenders including Black Horse (Lloyds Banking Group), Close Brothers, Motonovo Finance, Santander Consumer Finance, and others have all been identified in connection with DCA complaints. If your agreement was with one of these lenders, your complaint is in an area of active FCA scrutiny.
How Octave Resolution Services Helps You
Free Complaint Letters — Professionally Drafted
We are not a law firm and we do not provide legal advice. What we do is prepare clear, detailed, and professionally structured complaint letters that give your case the strongest possible foundation. Our letters:
- Cite the correct legal basis — the unfair relationship provisions of the Consumer Credit Act 1974 s.140A, FCA CONC rules on commission disclosure and creditworthiness assessment, and, where applicable, common law principles on secret commission (as considered in recent Court of Appeal and Supreme Court proceedings).
- Address the lender directly — setting out the specific details of your agreement and the basis on which you say it gave rise to an unfair relationship or breach of duty.
- State your remedy clearly — typically a refund of the excess interest attributable to the DCA, plus interest on that sum at the rate specified in the agreement or by statute.
- Include a formal 8-week response deadline and written notice that you will escalate to the Financial Ombudsman Service (FOS) if the matter is not resolved.
- Are tailored to your specific lender — taking account of publicly available information about that lender's DCA practices.
The service costs you nothing. We are funded by a small number of referral arrangements that are never charged to the consumer.
Escalation to the Financial Ombudsman Service
If your lender does not uphold your complaint within 8 weeks, or issues a final response that you consider inadequate, you have the right to refer your complaint to the Financial Ombudsman Service (FOS). The FOS investigates free of charge, its decisions are binding on the lender (though not on you), and it can award compensation covering the financial loss plus interest. We provide a supplementary escalation letter to support your FOS submission at no charge.
What the FCA Review Means for Your Complaint
The FCA has asked lenders to pause the 8-week clock on DCA-related complaints while its review is under way. This means your lender may not issue a final response until after the FCA publishes its conclusions. However, submitting your complaint now establishes your position, preserves your rights, and ensures you are included in any redress programme that the FCA may direct. We recommend acting without delay.
What You Could Get Back
The precise amount recoverable depends on the specific terms of your agreement, the interest rate that was set, and how much of that rate was attributable to the DCA. We make no guarantee of any particular outcome. What a successful complaint could include:
- A refund of the excess interest — the additional interest you paid because the dealer inflated the rate to earn more commission, compared with the rate you would have been offered without a DCA.
- Compensatory interest on that refund — typically at 8% per annum simple interest for the period you were out of pocket, as applied by the FOS in redress calculations.
- Removal of adverse credit entries — where the underlying agreement is found to have been improperly conducted.
- Compensation for distress and inconvenience — the FOS may award modest additional sums where the lender's conduct caused significant non-financial harm.
Illustrative Example — For Illustration Only
A consumer who financed a car at 10.9% APR when, without the DCA, they might have been offered 6.9% APR on a £12,000 agreement over 4 years could have paid several hundred to over a thousand pounds more in interest than they should have. The exact figure depends on the agreement length, the amount financed, and the spread between the actual and fair rates. Every case is different. We present this only to illustrate the type of calculation involved — it is not a promise or prediction of any particular outcome in your case.
The FCA has indicated that, if a redress scheme is ordered, it could involve significant sums across the industry. Independent estimates have suggested the total industry liability could be material. We do not repeat those figures here as they are subject to ongoing legal proceedings and regulatory review. What we can say is that your complaint has a recognised legal and regulatory basis and deserves to be heard.
Start Your Free Complaint Today
The FCA review is ongoing and time limits apply. Submitting a complaint now preserves your rights and puts you in the best position regardless of what the FCA decides. Our complaint letters are drafted within 48 hours of receiving your details — at no cost to you.
How the Process Works
- Step 1 — Free assessment (2 minutes): Answer a short set of questions about your car finance agreement — the lender, the type of finance (PCP or HP), the date, and the approximate amount financed.
- Step 2 — We review your case (within 24 hours): Our team checks your details and identifies the strongest basis for your complaint under the CCA 1974, FCA rules, and relevant case law.
- Step 3 — Complaint letter drafted (within 48 hours): A tailored, professionally worded complaint letter is prepared, citing the specific legal provisions that apply to your agreement.
- Step 4 — You send the letter: We provide clear sending instructions, including the correct postal and email address for your lender's complaints team.
- Step 5 — We support escalation if needed: If the lender does not resolve the matter within 8 weeks of responding (or within 8 weeks of receipt if the FCA pause has lifted), we help you take the complaint to the Financial Ombudsman Service free of charge.
We are not a law firm and we do not provide legal advice. We are a free complaint letter drafting service. We cannot guarantee any particular outcome. Whether your complaint succeeds depends on the specific facts of your case and the decisions of the lender or the Financial Ombudsman Service. Nothing on this page should be read as a promise or prediction of compensation.
Car Finance Claims — FAQs
Common questions about the car finance mis-selling scandal, answered plainly. Nothing here is legal or financial advice, and no specific outcome is guaranteed.
What is the car finance commission scandal?
Between roughly 2007 and 28 January 2021, many car dealers and brokers used what are known as discretionary commission arrangements (DCAs). Under a DCA, the dealer could set — or "flex" — the interest rate on a customer's PCP or HP finance agreement within a range allowed by the lender. The higher the rate the dealer set, the more commission they earned from the lender.
The critical problem is that this arrangement was almost never disclosed to customers. Consumers were therefore paying a higher interest rate without knowing that the dealer had a direct financial incentive to give them a worse deal. The Financial Conduct Authority (FCA) banned DCAs on 28 January 2021 and has since launched a wide-ranging review of past agreements. The FCA, Financial Ombudsman Service (FOS), and the courts are all engaged in establishing how and whether affected consumers should be compensated.
Do I qualify to make a complaint?
You are likely to have grounds worth exploring if:
- You took out a PCP (Personal Contract Purchase) or HP (Hire Purchase) agreement, typically before 28 January 2021;
- the finance was arranged through a car dealer or broker rather than directly with a bank; and
- you were not clearly and explicitly told, in writing, that the dealer or broker received commission from the lender, or that the commission was linked to the interest rate applied to your agreement.
Time limits generally apply: six years from the agreement date in England and Wales, or three years from when you became aware of the potential issue if that is later. If you are uncertain, it is worth checking sooner rather than later.
How much could I get back?
We cannot and do not guarantee any specific amount, and individual outcomes vary considerably depending on your specific agreement. What a successful complaint could include is:
- a refund of the overpaid interest — the portion of interest you paid because the dealer inflated your rate to earn more commission;
- compensatory interest on that refund at 8% per annum simple interest (the standard FOS rate) for the period you were out of pocket; and
- in some cases, removal of adverse credit entries or a modest additional award for distress and inconvenience.
The precise amount depends on the size of your agreement, the interest rate applied, how much of that rate was attributable to the DCA, and the length of the agreement. Each case is assessed on its own facts.
I've already sold the car or paid off the finance — can I still claim?
Yes. Whether the agreement is still running or has ended does not determine whether you can complain. Complaints about past agreements may still qualify provided they fall within the applicable time limits. In fact, many of the strongest cases involve agreements that were entered into years ago and have since been settled — the potential overcharge was baked into the interest payments at the time, regardless of what happened to the car or the agreement afterwards.
If your agreement ended more than six years ago, the position is more complex and may depend on when you first became aware of the issue. We recommend checking sooner rather than later.
Is it really free to use this service?
Yes, entirely. Octave Resolution Services provides free complaint letter drafting. There is no charge to you at any stage — not to check your eligibility, not to receive your drafted letter, and not to receive a supplementary escalation letter for the Financial Ombudsman Service if that becomes necessary.
We are not a no-win no-fee claims management company and we do not take a percentage of any award you receive. We are funded by a small number of referral arrangements that are never charged to the consumer. You are under no obligation to use any third-party service we might mention.
What paperwork do I need to start?
Ideally, a copy of your finance agreement and the name of your lender is the most useful starting point. However, you do not need to have paperwork to hand. If you know approximately when you took out the agreement, which car it was for, or which dealership you used, that is often enough to identify the lender and get started.
If you cannot locate your original agreement, you can request a copy directly from the lender under your rights as a debtor (Section 77–78 of the Consumer Credit Act 1974). We can include that request in the complaint process and guide you through it at no charge. Do not let missing paperwork put you off checking your eligibility.