Millions of UK motorists may be entitled to significant compensation following revelations about hidden commissions in car finance agreements. The Financial Conduct Authority (FCA) has launched a sweeping investigation into discretionary commission arrangements (DCAs), which could lead to payouts totalling billions of pounds.
What's the scandal about?
The controversy centres around personal contract purchase (PCP) and hire purchase agreements sold between 2007 and 2021. Many lenders allegedly allowed brokers to secretly adjust interest rates to increase their commissions - a practice banned by the FCA in 2021.
Who could be affected?
- Anyone who bought a car on finance between 2007-2021
- Customers who weren't told about commission arrangements
- Those who suspect they were charged higher interest rates
Potential compensation amounts
Financial experts suggest successful claims could average £1,000-£3,000 per customer, with some cases potentially reaching £10,000 or more. The total compensation bill might exceed £10 billion across the industry.
How to check if you're eligible
- Gather your finance agreement documents
- Look for any mention of broker commissions
- Check if the interest rate seems unusually high
- Consider consulting a claims management company
Important note: The FCA has paused the usual 15-month time limit for complaints while its investigation continues, giving consumers more time to come forward.
