Category: FCA Rulings

FCA investigations, rulings and regulatory updates on car finance mis-selling.

Car Finance Claims Deadline: When Do You Need to Act?

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One of the most common questions about the car finance mis-selling scandal is whether there is a deadline to claim. The honest answer is: not yet formally — but deadlines are coming, and the earlier you act, the stronger your position.

The FCA Has Extended Complaint Deadlines

In August 2023, the FCA announced that lenders would be given extra time to respond to car finance complaints while it conducted its review. This pause was extended in early 2024 and again following the Court of Appeal ruling in October 2024. Currently, lenders are not required to issue final responses to DCA-related complaints until at least after the Supreme Court delivers its judgment.

When Will a Formal Deadline Be Set?

Once the Supreme Court rules — expected in summer 2025 — the FCA is expected to publish its final redress scheme. That scheme will almost certainly include a deadline by which affected customers must submit their claims. Based on previous financial mis-selling redress schemes such as PPI, this deadline is likely to give customers at least 12 months’ notice, but it is not guaranteed and has not yet been confirmed.

What Is the Limitation Period?

Under general limitation rules, claims based on breach of contract or negligence must typically be brought within six years of the event — or three years from the date you became aware of it, if later. This means very old agreements could potentially fall outside the limitation period, though the FCA’s involvement and the specific legal basis of these claims means the position is more complex than a simple limitation calculation. Registering your claim now protects you from arguments about delay.

Why Acting Now Matters

Every redress scheme in recent memory — from PPI to packaged bank accounts — has had a cut-off date, and customers who missed it received nothing, regardless of how strong their underlying claim was. The car finance scheme will be no different. Registering early ensures you are on record, your agreement details are confirmed, and you are ready to receive your compensation as soon as the scheme opens for payouts.

Do not wait for a formal deadline to be announced. Check your eligibility today and make sure you are not one of the millions who misses out by leaving it too late.

Supreme Court Car Finance Ruling: What It Means for Your PCP Claim in 2025

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The Supreme Court’s landmark ruling on car finance mis-selling has opened the door for millions of UK drivers to claim compensation. If you took out a Personal Contract Purchase (PCP) or hire purchase agreement before January 2021, you could be entitled to a payout — and understanding the ruling is the first step to knowing whether you qualify.

What Did the Supreme Court Actually Rule?

In October 2024, the Court of Appeal ruled — and the Supreme Court subsequently upheld — that car finance lenders had been paying secret commissions to dealers without properly disclosing this to customers. This practice, known as a discretionary commission arrangement (DCA), meant dealers could increase the interest rate on your finance deal to earn a higher commission, at your direct expense.

The ruling confirmed that lenders had a legal duty to disclose these arrangements, and that failing to do so was a breach of fiduciary duty. This is highly significant: it means affected customers were effectively overcharged on their finance deals for years.

Which Lenders Are Affected?

The ruling has implications for virtually every major car finance provider operating in the UK during the relevant period. Lenders including Lloyds Banking Group (Black Horse), Santander, Close Brothers, and many others have already set aside hundreds of millions of pounds in provisions to cover potential payouts. The FCA has estimated total industry redress could exceed £30 billion.

What Are the Key Dates?

To be eligible, your car finance agreement generally needs to have been taken out before 28 January 2021 — the date the FCA banned discretionary commission arrangements. Agreements after this date are unlikely to be affected. There is no strict upper time limit set yet, though the FCA has confirmed it is reviewing the position for older agreements.

How Much Could You Claim?

Payouts will vary depending on the size of your finance agreement and how much interest you were charged over the term. Early estimates suggest the average claim could be worth between £1,000 and £5,000, with larger agreements potentially resulting in significantly higher refunds. The FCA has not yet published a final redress scheme, but is expected to do so following the Supreme Court’s final determination.

What Should You Do Now?

The first step is to check whether you had a PCP or HP agreement before January 2021. If you did, you should consider registering your interest in making a claim before the FCA’s deadline — which is expected to be set once the redress scheme is finalised. Acting promptly ensures your details are on record and you don’t miss out.

At PCP Tax Rebates, we help eligible customers understand their rights and submit claims at no upfront cost. Check your eligibility today — it takes just a few minutes and could result in a significant refund.

What Is a Discretionary Commission Arrangement — and Why Does It Matter?

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If you have been following the car finance mis-selling story, you will have heard the phrase discretionary commission arrangement — or DCA — mentioned repeatedly. But what exactly is a DCA, why was it banned, and why does it matter for your potential claim?

The Basic Concept

When you take out car finance through a dealership, the dealer acts as a credit broker. They receive a commission from the lender for arranging the deal. Under a discretionary commission arrangement, the dealer had the power to set the interest rate on your agreement within a range. The higher the rate they set, the more commission they earned — directly at your expense.

Why This Was a Problem

This created a direct conflict of interest. The dealer was supposed to be acting on your behalf, but their financial incentive pointed in the opposite direction. Because customers were never told about this arrangement, there was no way to challenge it or negotiate. You thought you were getting a fair rate; in reality it may have been inflated to boost the dealer’s commission.

When Were DCAs Used?

DCAs were widespread from at least 2007 until 28 January 2021, when the FCA banned them outright. The regulator found clear evidence that they led to customers being charged more than necessary, and that non-disclosure of the arrangement was a breach of legal duty.

Who Was Affected?

The practice was industry-wide. If you took out a PCP or HP agreement through a dealership before January 2021, there is a reasonable likelihood that a DCA was in place. This applies across lenders including Black Horse, Santander, Close Brothers, MotoNovo, and many others.

What Happens Now?

Following the Court of Appeal and Supreme Court rulings, affected customers are entitled to seek redress. Check your eligibility today to find out whether you could be due a refund on the interest you were overcharged.

The FCA Car Finance Investigation: Timeline and What Happens Next

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The car finance mis-selling saga has unfolded over several years, with multiple regulatory and legal milestones along the way. Understanding the timeline helps you know where things stand — and what to expect next.

January 2021: The FCA Bans DCAs

The Financial Conduct Authority banned discretionary commission arrangements from 28 January 2021, following concerns that they created a direct conflict of interest between dealers and customers. At this stage, the regulator stopped short of ordering redress for historic agreements.

January 2024: The FCA Opens Its Review

The FCA announced a formal review into whether customers who had PCP or HP agreements before the ban were owed compensation. Lenders were told to pause processing of complaints while the review was underway. The FCA also extended the deadline for lenders to respond to existing complaints, giving itself time to determine the right redress framework.

October 2024: The Court of Appeal Ruling

In a landmark judgment, the Court of Appeal ruled that lenders had breached their fiduciary duty by paying secret commissions to dealers without customers’ informed consent. This was a major escalation: it meant the legal basis for redress was far stronger than previously assumed. Lender share prices fell sharply on the day of the ruling.

Early 2025: The Supreme Court Appeal

Several lenders appealed to the Supreme Court, seeking to limit their exposure. The Supreme Court hearing took place in April 2025. Its ruling is expected to provide the definitive legal framework on which the FCA’s redress scheme will be built. A decision is anticipated in summer 2025.

What Comes Next?

Once the Supreme Court rules, the FCA is expected to publish its final redress scheme, setting out exactly how compensation will be calculated and paid. Lenders will then be required to contact affected customers proactively or process claims that have already been registered. This process is likely to play out through 2025 and 2026.

Why Register Now?

Customers who register their claim before the FCA publishes its scheme will be well positioned for swift processing once the framework is in place. Waiting until the scheme is announced risks missing early deadlines or being deprioritised. Check your eligibility now to make sure you are in the queue.