UPDATE – 13 November 2014
In late October, an Appeal Court judgment said commission should be refunded in a much broader range of cases, not just discretionary motor finance. The FCA is now proposing to extend the pause on discretionary commission complaints to cover fixed commissions as well. See Car commission refunds – can more people get refunds? where I cover this in detail
UPDATE – 24 September 2024
Following a consultation in August, the FCA announced an extension to the timetable for car finance discretionary commission complaints:
- the FCA had originally intended to publish its review setting out next steps in September 2024. This has now been postponed until May 2025, because there is a challenge to the Ombudsman’s decisions on these cases. The Judicial Review of the Ombudsman decision is bein heard in October 2024 and the FCA hopes for a judgment by the end of 2024;
- this FCA review is likely to lead to new rules which the FCA will consult on. It will have finalised these by December 2025;
- finance lenders will then have to follow the new approach;
- because of these delays, consumers are who have made a complaint and received a Final Response from the car finance lender now have longer to take their case to the Ombudsman The FCA says “If you’re sent a final response between 12 July 2023 and 29 April 2025, you’ll now have until 29 July 2026 to take your complaint to the Financial Ombudsman.”
UPDATE May 2024
See Car finance discretionary commission claims – update May 2024 which has a round up of recent news about these commission claims and looks at what, if anything, you should do now.
On 11 January 2024, the Financial Ombudsman (FOS) published several decisions about discretionary car finance commission, including one against Black Horse and one against Barclays Partner Finance.
In these cases, people were charged a higher interest rate to increase the commission the dealers got. And FOS ordered a refund.
This is a scandal that may have affected millions.
These FOS decisions open the way to a large number of claims for refunds from people who took out car finance before 28 January 2021. Martin Lewis says this may be “the new PPI”.
As a result, the Financial Conduct Authority (FCA) which regulates car finance lenders has taken the highly unusual step of pausing complaints about these commissions. It says:
It’s important that any complaints are dealt with by providers in a consistent, efficient and orderly way. Given the high number of possible complaints, there’s a risk this might not happen.
The FCA is now giving car finance companies longer to respond to complaints and allowing you longer to take your complaint to the Ombudsman.
Contents
Why refunds are being given
Discretionary commissions were unfair
Before 28 January 2021, it was common for some car finance lenders to allow a car dealer or broker to set the interest rate on a car finance agreement within a range. In this article, I just refer to the car dealer, not a broker, for short.
The dealer would get more commission from the car finance lender the higher the interest rate was. So they had an incentive to set your rate as high as they thought you might accept.
As the dealer chose the rate, this is called “discretionary commission”. This was not explained to the customers, so the commission is also called “undisclosed” or, in layman’s terms, “secret”.
These discretionary commissions were charged on a lot of car finance for both new and used cars. On 28 January 2021, the FCA banned this in car finance. So it isn’t a problem on recent contracts.
If you took out car finance before January 2021, you may have paid a higher interest rate than you should have.
This was unfair as:
- you were not told about it;
- if you had known, you may have negotiated to reduce it or looked to see if you could get finance at a lower rate;
- the dealer didn’t do any extra work to justify paying extra commission.
A typical Ombudsman refund decision
FOS issues key decisions when it wants them to be seen as typical of decisions the Ombudsman may take in similar cases.
This is what happened in the Black Horse case:
- the Ombudsman found that Black Horse was prepared to lend to Mrs Y at any flat interest rate between 2.49% and 5.5%, with any amount over 2.49% going to the dealer as commission;
- the broker had discretion over what rate to charge. It set the rate for Mrs Y at 5.5% – the highest it could. This got the dealer the most commission;
- the extra discretionary commission accounted for more than half of the interest that Mrs Y would have to pay;
- Mrs Y was not told how large this commission was, nor that the dealer had set the interest rate and the commission;
- the Ombudsman found that this was unfair.
To put this unfairness right, the Ombudsman ordered that:
- Mrs Y should only have been charged the minimum interest rate of 2.49% and the extra commission amount she was charged should be refunded;
- 8% per annum statutory interest should be added to the refund.
The Barclays Partner Finance case was very similar. The broker had discretion over what rate to charge and setting a higher rate increased the broker commission. FOS took the same decision to uphold the case and ordered the lender to pay a refund that was calculated in the same way as in the Black Horse case.
In other cases, customers may get more or less, depending on the range of interest rates a dealer was allowed to set and which rate the dealer picked. If a dealer was allowed to set an interest rate between say 3% and 10%, and you win your claim you would be likely to get a higher refund if you were charged 8% than if you were charged 5%.
No discretionary commission – then no claim
In a third case, against BMW Financial Services, FOS found that the broker was paid a fixed commission by the lender. The customer who bought the car was not told how large the commission was, but the paperwork stated that the broker did receive a fee. Here FOS decided that the commission was not unfair, because it could not be increased by the broker, and the case was not upheld.
If no discretionary commission was charged on your finance, there is no claim for you to make.
Could this apply to your car finance?
Three things to check
Three things matter:
UPDATE none of these three things may matter after recent Appeal Court case
- the finance must have started before 28 January 2021 (After that date discretionary commission was banned.)
- the sort of car finance You can make a claim about Hire Purchase (HP) or Conditional Sale (CS) or Personal Contract Purchase (PCP)any of these types of car finance. (You can’t make a claim for Personal Contract Hire (PCH), sometimes called car leasing. And you can’t if you arranged the loan with a bank and it was not secured on your car.)
- whether you were charged discretionary commission There is a list of lenders who have stated they have never changed this sort of commission below – if your lender is one of these, there is no point in asking. But if your lender is not on that list, you have to ask to find this out. This is the key first step in making a claim, and it is easy – see below.
What doesn’t matter:
- if you are still paying the finance, you finished paying for it or you defaulted;
- if you still have the car, if it has been sold, or repossessed;
- how easy it was to pay the finance. That is irrelevant – this is a complaint that you were charged too much, not that it was unaffordable.
The Ombudsman can look at cases going back six years, or it can go back much further if you have complained within 3 years of finding out that there was a problem. And this is probably the first time you have heard about this! If your car finance is very old, there may be a problem if the lender has not kept any paperwork about it. But many very old PPI claims were won, so don’t let a worry about this stop you from making a claim.
Lenders who have never used discretionary commission arrangements
I cannot guarantee the accuracy of this list – it is for guidance. The following lenders have made a clear statement that they have never used discretionary commission:
A – Admiral; Advantage Finance; AutoLend; AutoMoney;
B – Billing; Burnley Savings & Loans
C – Car Loan Centre; Carmoola
F – First Response Finance
G – Guardian Finance
L – Lendable; Lombard
M – Mallard Finance; Moneybarn
O – Oodle; Oplo
P – Premium Plan
R – RateSetter; Retail Money Market
S – Specialist Motor Finance
T – Tandem
V – Vehicle Credit
1st Stop Finance.
The above list includes many “bad credit lenders” – if you had finance from one of them, then read the section at the bottom of this article on whether you can make an affordability complaint.
Lenders who have sometimes used discretionary commission arrangements
I cannot guarantee the accuracy of this list – it is for guidance.
This list is based on the original FOS decisions and the replies that some people have received in response to their query about discretionary commission. As more people leave comments here about their replies, this list will no doubt get much longer…
B – Barclays Partner Finance; Black Horse; Blue Motor Finance, BMW
C – CA Auto finance; Close Brothers
H – Honda; Hitachi Capital
F – Ford
M – Marsh Finance; Mobilize, Moneyway; Motonovo
S – Santander; Startline; Stellantis
V – Vantage; VWFS.
If your finance was through one of these firms you still need to ask if there was any discretionary finance on your contract. Just because a lender sometimes used it doesn’t mean they always did.
How to make a claim
Make an initial enquiry
Originally I had a template here. Now I suggest you use the MSE free tool. This will be updated for the recent Appeal Court ruling
There may be a delay before you get a reply
Normally a firm should respond within 8 weeks or you could send it to the Ombudsman.
But the FCA says:
We’re assessing the extent of the problem to make sure that, if you are owed compensation, you get it in the best way possible.
And as part of this, the FCA is allowing firms longer to respond to these complaints. And you are also allowed longer to send your complaint to the Ombudsman. It is still good to start the process now, but it may take a while.
You may get one of the following types of reply back;
- we don’t have to answer this for at the moment as the FCA has allowed us to pause complaint handling
- we don’t any records because of the age of your finance
- we have never used discretionary finance
- no discretionary finance was used in your case
- a description of the commission arrangement that was unclear or difficult to understand about whether discretionary finance was used
- discretionary finance was used.
If you could leave a comment below this article, this will help build a picture of who is most likely to be able to make a claim.
You do NOT need to use a claims company
You don’t need a claims company to do this or a firm of solicitors. It is simple to do yourself and a claims company will take a very large amount of any refund that you get.
It will not be quicker to do with a claims company or solicitors. They don’t have lists of who has valid claims, they will ask the same question that you can. Nor will you get more compensation that way.
IMPORTANT could you also make an affordability complaint?
These undisclosed commission complaints are not the same as affordability complaints.
But if your car finance was very hard to pay from the beginning, it may have been “unaffordable”. You may have had to get behind with other debts or borrowed more in order to be able to pay the car finance.
Here you may be able to win an affordability complaint – see Were you sold a car on unaffordable car finance? for details and how to make an affordability complaint.
NB it can be hard to win an affordability complaint unless you have good evidence about your finances at the time the finance started, such as bank statements. These are easy to get for the last 6 years even if you have changed bank accounts. But a long way back can be tricky even if you are still with the same bank. This issue isn’t relevant for discretionary commission complaints, only affordability.
If you win an affordability complaint you will get all the interest refunded. In a discretionary commission complaint you only get part of it back.
So I suggest you make the affordability complaint first. Because if you win you will get a larger refund. And affordability complaints are likely to be quicker than discretionary commission complaints. If you lose, you can then revisit the undisclosed commission complaints later.
Any questions?
Ask them in the comments below! These claims are very new, so finding out what other people are doing and the sorts of responses they get can be a great help.
Car finance affordability complaints
How to ask for refunds for all types of debt
My energy DD can’t be right!
Sharna Stewart says
I took out a car finance deal in 2014 with Volkswagen, I was wondering can I still lodge a query with them about the sales commission?
Sara (Debt Camel) says
We don’t know yet if there is an “earliest” date for these claims – but wehat you should do now is simply as VW if discretionary commission was paid on your finance.
Vicky Webster says
Hi, I had car finance around 2001 but have no idea who with. How do I find out? I don’t have any old bank statements.
Thanks
Sara (Debt Camel) says
You could ask the dealer. At the moment we have no idea if these claims will be able to go back that far
Lucy says
Hi, Thank you so much for doing this!
Any idea how to contact Mercedes-Benz Finance (or who they use)? I tried to fill in the form on their website but it says my details don’t match (its an old agreement) so they emailed to say unless I update them with correct details they won’t answer my email :/
Sara (Debt Camel) says
I have added an address for them to the page linked to in the article above.
You need to give your full name, a telephone number and either the agreement number of the contract or the registration number of the car.
Lucy says
Thank you so much!
Jacqui says
Car finance – discretionary commission.
Hi, i have just tried the email address for Alphera/BMW and had a failed delivery notice for jane.white@bmwfin.comjane saying the domain doesn’t exist
Would you have any other contact details please.
Sara (Debt Camel) says
The address I listed is jane.white@bmwfin.com – is that what failed?because the one you just put in your comment had a stray “jane” on the end, which would have been invalid.
BMW FS Customer Service says
To assist customers of Alphera, BMW and MINI Financial Services we have a dedicated contact email address for this topic: commissiondisclosureenquiries@bmwfin.com Please include your name, date of birth, postcode, agreement number (if known) and vehicle registration number.
For complaints on any other topics please use csescalations@bmwfin.com.
Sara (Debt Camel) says
these have now been added to my email address page
Dan says
Hi Sara,
Do you have any information for GE money? Or information for anyone who took them over?
Thanks
Dan
Sara (Debt Camel) says
Try the Santander email from my list – I think they acquired GE’s Motor Finance
Keith Rooney says
I have had 3 cars since 2010-2023 can I make 3 claims?
Sara (Debt Camel) says
There is no limit to the number of claims you can make. But at the moment you are not making a claim, you are just asking the lenders if your car finance included discretionary commission.
What was the date your most recent finance started? It has to have been before 28 January 2021.
J says
Thanks, this is really helpful. Do you know how long finance lenders are required to keep your agreement information for? I had an agreement in 2013, 2016 and 2018. I don’t have any documents for any of them though but do know the lender names (apart from the 2013 one).
Thanks
Sara (Debt Camel) says
This depends on their data retention policy. Just ask the lender whether there was any commission paid and take it from there.
The 2013 finance, you could ask the dealer if you remember who that was?
Paige says
Thanks for this, its really helpful. I have no idea if there was any discretionary commission. I had bad credit when I got my car so went through an organisation called ‘Refused Car Finance’ and was given finance by Moneyway, the interest was huge!! (but I had no choice at the time). It will be interesting to see how this plays out.
Toni O’Connell says
Firstly, what if the finance company lies and says there was no discretionary commission when there was? I feel this is going to be so huge that to begin with they will try to avoid being honest about these contracts so people don’t make a complaint.
Also, I have had cars on PCP dating back to 2001, as this is the first I have heard about this issue can I date my complaint back that far? And you give examples about Blackhorse, Santander and Barclays Finance but what about Ford and Kia?
Sara (Debt Camel) says
I don’t know how long this practice of discretionary commissions has been going on for. It may always have happened. or it may be something that was invented 15 years ago and then only because common in the last 8 years (NB I literally just invented those dates to give one possible example, I have no reason to think they are accurate). The FCA is looking into this now and we may know more about the market overall later in the year.
The examples I gave were because those were the decisions that the Ombudsman published – I don’t have lists of which companies used this practice and at what times. i don’t think anyone does at the moment.
I know people are suspicious about companies lying. Particularly on the bad credit/high interest end of the market. That doesn’t sound like any of the companies that you have mentioned.
But why not just make an enquiry at the moment? See what they reply?
C Tumulty says
Do you know an email for PSA finance?
Sara (Debt Camel) says
use the email given for Stellantis
K says
Hi Sara, I have today had correspondence through saying I owe the car finance company money and it is going through Capquest who are working on behalf of Arrow Poplar Designated Activity Company to get this back, am I best of emailing Capquest as I can’t find Arrows email. Thankyou
Sara (Debt Camel) says
What was the name of the car finance company given on the letter?
Might this debt be old – more than 6 years since you last made a payment to it?
Does this debt show on any if your credit records, – have you checked all three credit reference agencies? (See https://debtcamel.co.uk/best-way-to-check-credit-score/ to be sure._
Don’t email anyone about this until you have answered the above questions
K says
It is The Car Finance Company they are no longer, I am confused as I was under the impression from 2017 it had all been paid of, bit of a coincidence as I have been trying to find the dealership who I got the car from to find out if a discretionary commission was used. Turning into a nightmare tho as the car dealership has also changed hands and therefore changed names.
K says
Nope nothing is showing up on any credit reference agencies and it was by The Car Finance Company Portsmouth that was the name of the car finance.
Sara (Debt Camel) says
So it seems possible that either you didn’t owe any money at all or if you did the debt may so old as to be stature barred – that is too old to be enforced in court. See this fact sheet by National Debtline https://nationaldebtline.org/fact-sheet-library/statute-barred-debts-ew/. You can talk to National Debtline about this or simply send Capquest the template letter in that fact sheet.
If they can show you have made a payment in the last 6 years then you have further options – come back here.
Shirley says
The finance I took out was with a company called Raphael’s Bank, who went into administration the car finance was passed onto Paragon who I have received a email saying that they take no responsibility as they did not set up the original contract, what is my next step?
Many thank
Shirley
Sara (Debt Camel) says
At this time the best thing is to ask the dealer or broker whether there was any discretionary commission applied to your finance.
The FCA is looking into the whole commission situation and it will be clearer in a few months who people can make claims against – for now you are just making a query not a claim to find out some facts that will be useful.
Chris says
Hi Sara,
If the finance company are no longer trading but the garage who introduced me, and thus received said commission, are still trading do I have an option to complain to them or is that a total non starter?
Thanks in advance
Chris
Sara (Debt Camel) says
We don’t know at the moment what will work, but complaining to the dealer or broker is a possibility.
The first step here is to ask the dealer if there was any discretionary commission applied to your finance.
laura says
I had a car on PCP through seat finance but cannot find their email address to contact them
Sara (Debt Camel) says
try the VW address
Hannah Hanson says
Hello!
I’ve received an email back from Startline motor finance today saying that the commission paid to the credit broker for the agreement was £499.38.
What is my next step? Thank you in advance!
Sara (Debt Camel) says
Go back and ask if this was a fixed commission or if any of it was discretionary.
Lisa says
I’ve just submitted my claim today. How long did you have to wait to hear from them?
Emma H says
I’ve had PCPs and HP since 2003. I can’t remember all the registration numbers, and I’m unlikely to have any paperwork- how can I find out which finance companies (there are likely to be several) were involved in my arrangements?
Sara (Debt Camel) says
You can ask the dealers. Check your credit report for the more recent ones. See if you have old emails. If you have Used the same insurance firm they may still have old records – you could Send them a Subject Access Request asking for all the details they have about you.
I would get going for the more recent ones that you can remember.
There is no easy solution here. Signing up with a claims firm won’t help – there is no secret database with all this information.
Nikki says
Hi, I had HP by Ford credit from March 2010 to 2014. Will I be entitled to see if there was any discretionary commission? Is there an email address you can send me please?
Thanks
Sara (Debt Camel) says
There is a link in the article above to my page with a list of lender emails.
Alan Watson says
Hi Sara
Thank you so much for highlighting this, I heard you on LBC.
I bought a car about 10 years ago from a used car dealer Fords Of Windsford (not connected with Ford cars). I don’t know what finance company they used, is there anyway to find out. I shredded a lot of documents when I moved a few years ago.
Many thanks
Alan Watson
Sara (Debt Camel) says
I suggest you ask the dealer.
Alan Watson says
Thank you.
Alan
Heather Foxen says
Hello, my finance was through Lloyds Banking Group Asset Finance, I can’t see them on the list already, do you know the best email to use?
Thank you so much for this article!
Sara (Debt Camel) says
Try onlinecomplaints@lloydsbank.co.uk
Put Query about Lloyds Banking Group Asset Finance commission as the title
Km says
Hi Sara, I sent an email to then 3 weeks ago asking if they paid commission and haven’t had a response. Is it just a waiting game? Thanks
Sara (Debt Camel) says
It really is.
Kelly says
Hey.
Would you have an email address for Ford credit please?
Thank you.
Sara (Debt Camel) says
It’s in the page of emails I link to
Neil Cutland says
Hi Sara. Brilliant interview on LBC tonight! Thanks for your efforts. I need to complain to Fiat Financial Services, but can’t find them on your website nor the FCA’s. Can you help with their email address please? Many thanks.
Sara (Debt Camel) says
Try CA Auto Finance and if that doesn’t work Stellantis
Neil Cutland says
Thanks for your previous reply Sara. Do you have an address for Honda Finance Europe, too please?
Sara (Debt Camel) says
simon.ellis@honda-eu.com
I will add it to my page
Gareth Cornock says
Ive had multiple cars over the years since the age of 18. changed bank accounts, moved house.
How am i to find the account details?
Sara (Debt Camel) says
See my reply to Emma H just above. No easy answer but get going on the buts you can!
Shazad Din says
Hi do you have lombards email address ?
Sara (Debt Camel) says
Lombard North Central generalenquiries@lombard.co.uk
Lombard Finance peter.lord@lombard.co.uk
They have the same website – so if one email doesnt work, try the other
Thomas Flynn says
Hi Sara. How long is reasonable to wait for a reply to the initial enquiry?
Sara (Debt Camel) says
I would say 8 weeks. Don’t hold your breath.
SW says
I have emailed FCE bank and their response contains information about the FCA announcement.
What will happen next with your complaint?
• After this acknowledgment, we will complete a full investigation into your complaint (we may call you for further details)
• We will then provide a Final Response, normally within 8 weeks of your initial complaint. This will explain what we have found, what we plan to do as a result and why we made the decision. This will normally be in writing via letter, but we can email it to you if you want.
· Following the FCA announcement on 11th January 2024, the FCA has extended this by 37 weeks (so a business may have up to 45 weeks in total) to handle car finance commission complaints.
· Complex complaints can take longer to resolve. If our investigation is likely to take longer than 8 weeks, we will contact you with an update on your complaint – a well as provide you with your escalation options.
We will keep you updated but if you feel there is additional information that will help us resolve your complaint, you can contact us by email or phone at any time.
Sara (Debt Camel) says
I suggest you reply to them that you are simply making a query about whether there was any discretionary finance on you contract and that at this point you have not made a formal complaint, so the FCA pause on complaint handling does not apply.
SW says
Thanks Sara will do.
Neil Cutland says
(Following this thread with great interest, but I need to turn off all the notifications please. Where do I do this?)
Sara (Debt Camel) says
there should be an unsubscribe at the bottom of your email
Arran Morrison says
Has anyone had a reply from RCI yet? I know my deal was very old (2008/09), but not even a response to my enquiry and subsequent follow up email.
claire sullivan says
I took my loan out with FCA Automotive Services UK/ Trading as Alfa Romeo Financial Services.
I am struggling to find email address – can you help please?
Sara (Debt Camel) says
Try the email given on my list for Stellantis
Andrea says
Hi Sara.
I like to send you some responses ,don’t know what to do next.
Can I send pictures of letters.
Thanks
Andrea
Sara (Debt Camel) says
Sorry no, please copy in the relevant parts into a comment.
Patricia says
Hi Sara, I am not quite sure whether this applies to me but thought I’d ask anyway. I signed my agreement in 2022 for PCP through Porsche finance. Just before my car was ready in 2023, they informed me that my monthly payments were going to be higher than initially agreed in 2022. I just wonder whether there would have been any discretionary commission added to justify this increase as it was totally unexpected and I wasn’t aware that this could happen having finalised the payments and agreement upon purchase the year before (2022). How can I find out where I stand here? Would this be a possibility?
Sara (Debt Camel) says
Discretionary commission was banned by the regulator in January 2021, so this can’t be the explanation.
Claire says
If it helps any one else FCA Automotives changed their name to CA Automotives in April 2023
Alan Shield says
I have received the following reply from First Response finance who in fairness I always found to be a decent lender to work with.
You may find it interesting/useful.
Hello Alan,
I am able to advise that First Response Finance has never operated discretionary commission arrangements.
Whilst we do pay Dealers commission, where we pay, it is always on a flat fee basis, the interest rate is predetermined and the dealer is not able to set or adjust the interest rate.
Therefore, the FCA’s concerns/intervention does not apply to your agreement with First Response.
I hope that clarifies matters.
Yours faithfully,
John Bates
First Response Finance
Jacob says
Thanks for great article!
Providing finance company (Motonovo in my case) confirms the discretionary commission, how do I process this further and make a complaint?
Sara (Debt Camel) says
So far the lenders have rejected every complaint, which would waste everybody’s time having to go through the Ombudsman. Now the Ombudsman has made its key decisions, the FCA is currently looking at how to make the claims process efficient – we will know in a few months. the important thing at the moment is to try to establish if you have a reason to make a claim. .
Sara (Debt Camel) says
One person with Motonovo finance asked their dealer and they were told there was discretionary Commission. You might want to try that too.
Abbie says
I contacted Santander regarding my Hyundai finance agreements and have received a response to say that they cannot deal with my email as a query and have to lodge it as a complaint – what should I do now?
Sara (Debt Camel) says
Tell them they can handle it as a complaint if they want, but you will not be able to supply details for the complaint until they respond to your query.
Aqua Abbott says
Hi, I emailed motonovo using your (very handy) template to enquire a couple of weeks back but they sent me a complaint acknowledgement email – basically acknowledging that i’d emailed and advising i’ll be assigned a complaint handler and in 8 weeks should have a response.
I hadn’t actually formally complained yet so i have just called them to get them to remove the complaint and was advised they have to send the email acknowledging as a complaint in order for them to assign case handlers and investigate whether or not affected by the discretionary commission, which will take up to 8 weeks.
So looks like it will be a couple of months before I know if I’m even affected, then i will be able to ‘formally’ complain if applicable.
Thought it might be worth the heads up on here in case anyone found themselves in receipt of a similar email.
Sara (Debt Camel) says
One person with Motonovo finance asked their dealer and they were told there was discretionary Commission. You might want to try that too.
Jamie says
I’ve contacted our broker (Honda) local dealership but they can’t tell me whether or not they charged discretionary commission, claiming the only way to find out is by making an enquiry/complaint, however, with the FCA investigating, they have put a stop to all complaints, so I’m not going to be able to find out. Is there any other way of finding out? Seems pointless making a complaint if there was no discretionary commission…
Sara (Debt Camel) says
have you asked the finance company?
Jamie says
Hi Sara, I have spoke with the finance company who have informed me that they generally decide the APR after they’ve been given all information by the broker (Honda). Due to this, I’m not sure if ‘discretionary commission’ would have been discussed/applied to my finance, but I’m unsure how to even find out if it has.
Sara (Debt Camel) says
hmmm – I think that is a very cautiously worded reply. It would have been so much simpler to say Honda has never used any form of discretionary commission… or that there was no discretionary commission involved in you case.
I think you should sit on this at the moment. You haven’t yet made a formal complaint. And if Honda wish to argue that you have, the new FCA rule gives you 15 months to go to the Ombudsman. So pop back here in a few months time and see what is happening.
IainHL says
Hello Sara,
Thanks for the article, and the suggestion about getting the process underway.
I purchased a Vauxhall on finance from a main dealer back in 2005. I can remember the finance company was GMAC (Vauxhall were part of General Motors back then). Would I still use the GBCAR-CSC-Complaints@vauxhallfinance.com email address from the list, or is there an alternative one for GMAC?
I don’t know if I still have the paperwork, I’ll have to go digging in my archives to check. However I do know the registration, dealer and the month/year.
Thanks
Sara (Debt Camel) says
I suggest you try that first. let me know if it does not work, or if they say to use something else.
NB this is very old finance. We do not know at this point whether discretionary commission was used at that date by anyone, or if the refunds will apply to this. But finding out if it was used in your contract is the useful first step.
Mike McGarrigle says
Would you have the contact email address for Barclays Partner Finance ( Cardiff?) and Hyundai? many thanks indeed
Sara (Debt Camel) says
in my list of lender emails: https://debtcamel.co.uk/car-finance-lenders-email-addresses/
Sharon says
Please see response below from the finance company and what do you advise I do now??
Thanks
Good Morning,
Thank you for your email.
We would like to take this opportunity to confirm that AutoMoney Limited have never entered into a difference in charges commission model with any of our partners.
Please note the following in your case:
1. a commission was paid by us to the broker, Car Giant;
2. the commission paid was not a difference in charges commission model;
3. a flat rate of commission, being £350.00 was paid to the broker;
4. the commission value did not affect the interest rate paid by you; and
5. the broker was not able to set the rate of interest paid by you.
If you require any further information, please do not hesitate to contact us.
Kind Regards
Jenny Jones
AMMF Compliance
Sara (Debt Camel) says
That is quite clear that they haven’t used any form of discretionary commission so you don’t have a claim here.
Some people are asking how you can tell the finance company isn’t lying? Obviously there is no easy way. I have no reason to think they are. You can pop back here in 6-9 months and see what is happening if you want.
Brian Healy says
Response received from Marsh. They treated my enquiry like a complaint; key points below, they sent me a copy of the original finance agreement and a commission statement. I used the template provided on this site, only adding my customer and vehicle details relevant to the enquiry.
“On 29 January 2024 you contacted us to raise a query, and based on the content of your email, it would appear that the claim relates to commission, specifically Difference in Charges (DIC) and disclosure of commission.
Marsh Finance either work on a fixed rate or amount with a potential volume bonus, but this only relates to the loan advance, therefore the interest has no bearing on the amount of commission we pay to an introducer.
However, for the purpose of your query we note that you applied for finance through Arnold Clark around 29th April 2013. Marsh Finance paid a commission to the dealership after you took possession of the vehicle, the amount paid was £150.00 which is a fixed amount of the advance amount and therefore does not impinge on the interest.
In view of the above, we can confirm the claim has not been upheld and we will look to close this case. However, should you have any further concerns please do not hesitate to contact us.”
Ben Jones says
Hi,
I contacted Mobilize financial services who have taken over RCI financial services who I purchased a car from back in 2008. I sent them a letter about the commission but they have said because my agreement ended over 6 years ago all of my data has been deleted as per GDPR rules. Is this allowed?
Thanks
Sara (Debt Camel) says
Yes it probably is.
Sara (Debt Camel) says
The FCA, the regulator, has told firms in January that they should “maintain and preserve any records that are, or could be, relevant to the handling of complaints or civil claims” about discretionary commission. However data may have previously been deleted.
Fee says
Hi Sara,
Is it possible to complain regarding ‘The Car Finance Company (2007) Ltd’ regarding discretionary commission.? Looks like they no longer exist under this name as of Nov 23, but wondering if there is anyone else to contact
Sara (Debt Camel) says
You can ask the dealer.
Roger Poole says
Firstly, thank you for this information. I started a pcp car finance back in 2016 with GMAC finance but can’t see an email address in your list and the FCA register says they are no longer registered. Would you know an email for them or if they have perhaps been taken over by one listed. Thank you
Sara (Debt Camel) says
was this a Vauxhall?
Roger Poole says
No it was a Ssangyong Tivoli. Although the finance was through GMAC I have just found a letter from Vauxhall from when the agreement ended so I assume they took the finance over. I’ll try emailing the Vauxhall address on your list and see what happens. Thank you
Josh says
I had an awful loan back in 2017 that is still affecting me today – I just looked at the original sales doc and the flat rate was 14.09%., APR was 24.99%.
How stupid I was!!
Sara (Debt Camel) says
who was the lender?
Josh says
Blue Motor Finance – the car was purchased through Trade Centre Wales.
The car was sold at an insane markup and what was realistically a £3500-£4000 car was £10,000 after interest.
Sara (Debt Camel) says
Did you get to the end of the finance ok?
Josh says
I ended up getting a bank loan to pay it off as the interest was unmanageable
Sara (Debt Camel) says
You could look at an affordability complaint about this.
Josh says
Yes, I’ve just typed up a storm and backed it up with 20 pages of financial documents. It turns out the APR was 26.97% lol. Thank you for everything you do Sara.
Josh says
They’ve sent me a number of letters now saying they’re investigating my complex case and had a personal email this morning to say it will be concluded 29th March.
Unsure if they’re inundated with emails now or if my case is complex as I was meant to reveive a response in 7 working days.
Ruth M says
Do we know yet if Specialist Motor Finance is one of these? The finance was arranged CarFinance247. I have submitted an affordability complaint to SMF but they have relied today saying that thy believe it is time barred! I had the finance from 2017-2021.
Sara (Debt Camel) says
Send the affordability complaint to the Ombudsman (details on https://debtcamel.co.uk/refunds-large-high-cost-loans/) as the Ombudsman can choose to look at old cases if you have only just found out you can claim.
Ruth M says
Thank you Sara, I was hoping you’d advise that. Do I need to tell the ombudsman how or why I’ve only just found out? Thanks
Sara (Debt Camel) says
yes.
Lucy says
Hi all,
I heard back from Audi Financial Services. They have said because they are the lender, not the broker, this does not apply to them. All they’ve confirmed is that commission was paid to the dealer by them.
I would assume this is going to be the same for VWFS – VW financial services.
Thanks
Lucy
Sara (Debt Camel) says
Can you go back and and ask them for details of what commission was paid and how this was calculated – whether it was a fixed amount or whether the dealer or the broker had any discretion over the interest rate you paid. Point out that the Financial Ombudsman decisions published in January were against the finance lender.
Lucy says
Thank you I will do so now.
Lucy
Badger says
Just sent my email to customerresolutions@vwfs.co.uk today. With an APR of 11.9% I’m hoping to get some interest back the greedy b*****! I added a little extra as Sara mentioned; and left the dealer address bought from so anyone else affected will know. Email sent:
Good Evening,
I took out car finance as a Hire Purchase from Volkswagen Financial Services (UK) Limited, trading as Audi Financial Services, in 2018, which was subsequently paid off in full in 2022.
Reference/Agreement Number:
Registration:
Car:
Dealer: Stockport Audi, Green Lane, Stockport, SK4 9DU
Date Signed Contract:
After reading the information from the FCA about discretionary commission arrangements on car finance, I would like to know more details regarding what commission was paid.
I would like you to tell me if you used a discretionary commission arrangement on my finance and to give me details of that arrangement. Please include details of what commission was paid and how this was calculated – whether it was a fixed amount or whether the dealer or the broker had any discretion over the interest rate you paid. Please note that the Financial Ombudsman decisions published in January 2024 were against the finance lender, which is VWFS.
This is not a complaint, I am just seeking this information as I am entitled to, in order to assess my own situation.
Many thanks,
Best Regards
Alex says
Hi, thanks for the very useful article.
I sent the emails to my lenders a couple weeks ago asking for the details of any discretionary commissions (didn’t raise a complaint, as suggested).
How long do you think I should wait before chasing them up and do they have an obligation to even respond if I’m not filing a complaint with them?
Thanks
Sara (Debt Camel) says
Yes they should respond to a query. There is no set time but it shouldn’t be more than 8 weeks
Natalie says
Hello
I have received a reply advising that commission was paid on my agreement and the amount that was paid. What would be my next step please?
Thank you so much!
Sara (Debt Camel) says
Which lender is this?
How large was the commission and did they say anything about how it was calculated, eg was it a fixed about?
Natalie says
Hi Sara. Extract from the email:
With regards to your query, we can confirm that the total commission amount paid on your agreement was £****.**
Please note that, at the current time, we are unable to confirm whether your agreement falls within the remit of the recent Policy Statement released by the Financial Conduct Authority (“FCA”) in respect of discretionary commission arrangements.
Sorry! It’s mercedes-benz finance
Natalie says
Hi Sara
Total amount was £1,132.56. Nothing mentioned about how it was calculated.
Thanks you :)
Sara (Debt Camel) says
ok so that isnt helpful as they can’t/won’t say how it was calculated. Go back and ask them why they cannot tell you how the commission was calculated.
Natalie says
Email sent. Will post update once I’ve received a reply.
Natalie says
Hi Sara
What are your thoughts on Martin Lewis advising to submit a claim now?
Thanks, Natalie
Sara (Debt Camel) says
Sorry I missed your comment. Martin is advocating much the same approach as I am – submit a query at the moment to find out if there is any discretionary commission.
Natalie says
Thanks Sara. Commission was paid & I’ve asked how it was calculated. Do I wait for MBFS to confirm how the commission was calculated before submitting a claim? Thanks
Sara (Debt Camel) says
Yes. If it was a flat rate there there is no claim.
Lzz says
Hi,
I am currently with moneybarn but a broker was used by the name carfinance247 to get me the loan.
My question is do I approach carfinannce247 or moneybarn?
Also if I email the above template and the response I get is that everything was according to rule and nothing extra was charged where do I stand?
As of bow I am paying over 36% intrest!
Sara (Debt Camel) says
Moenybarn have been clear that they have never used any discretionary commission arrangement, so there is no claim here.
How long ago did this finance start? Has it caused you a lot of problems?
Lzz says
Hi,
Started Jan 2021
No issues or anything so I don’t have a claim?
Thanks
Sara (Debt Camel) says
If paying it had been very hard you would have a potential affordability claim.
But you have no discretionary commission so there is no claim about that.
Marian says
Hello
Do you have contact details for Zopa? This is the company I obtained finance through back in august 2019.
Thanks!
Sara (Debt Camel) says
Was this HP/PCP? Or just a bank loan? Did you find the finance yourself or was it recommended by the dealer/broker?
Claire Sulliv says
I have received this back from FA Auto
Thank you for your recent communication regarding your complaint.
I can confirm that we have officially logged your case, please find a copy of your acknowledgement letter along with our Complaints procedure attached.
How should I reply?
Many thanks for your help
Please do not hesitate to contact us if you have anything further to add.
Kind Regards
Sara (Debt Camel) says
Please reply that you have not made a complaint, you have just asked for information. And ask when you will get a reply.
Clare J says
Hi Sara,
I’ve had response from Moneybarn they said that the following:
‘We paid the Broker a commission of £650.00. Under our commission arrangements with the Broker, the amount
of the commission was a flat fee. The Broker had no ability to influence the amount of the commission, and it
did not change depending on the rate of interest payable under an agreement. We did not operate a ‘difference
in charges’ commission model. The disclosure in the pre-contractual explanation document clearly states that commission will be paid not may
or might. When you entered into the agreement, there was (and is) no requirement on us under CONC to disclose anything
about commission. There was, however, a regulatory requirement on the Broker to disclose the existence of
commission in certain circumstances. If there has been any failing by the Broker (and we are not aware of any), then a complaint should be made directly to the Broker’
I’ve looked at the paperwork and cannot see £650 being stated anywhere but at the time I wouldn’t be looking at that all I was checking was the amount I was taking out on the car/interest/monthly payment.
Can I still raise this as a complaint?
Thanks,
Clare
Sara (Debt Camel) says
The actual commission amount is unlikely to have been stated anywhere – but was there a sentence saying that the broker may receive some commission from the finance?
Clare says
Hi Sara,
That’s what Moneybarn said but I’ve looked at paperwork and can’t see anything about that.
All I was concerned about was checking the finance part/deposit/monthly payment amount and confirming bank details. Moneybarn are one of worst companies I’ve dealt with and if they can get away with anything they will. Could I still raise this as a complaint to FOS?
Thanks for your help.
Clare
Sara (Debt Camel) says
You don’t have a claim against Moneybarn for discretionary commission because there wasnt any – it was a flat rate.
You may have a claim against the dealer/broker if they did not tell you that they may have received commission – ask the dealer/broker if they told you about the commission saying you cannot see it it in your paperwork.
I think you took a complaint against Moneybarn about affordability to the Ombudsman already – so there is nothing more that can be done.
Clare says
Hi Sara, I’ve asked them to tell me where on paperwork it says about £650.
Thank you for your help.
Clare
Sara (Debt Camel) says
it wont mention that number. It just has to say that there is likely to be some commission. See the bit in the article about about the recent decision by FOS in favour of BMW.
JN says
£650 is a high commission. And fair to say that if you would have known it was this high, you may of taken your business elsewhere for a cheaper deal.
But unfortunately it would appear this high commission wasn’t disclosed to you. So you wasn’t aware.
That is very unfair…..
Sarah L says
Hi Sara,
I had two finance agreements with VWFS that fall into the scope of this and I have sent the template email (word for word but also confirming the address of the dealership), asking for confirmation as to whether discretionary commission applied. This was treated as a formal complaint and I’ve received a final response from VWFS (copied below with personal info redacted). But reading this, Im not sure the question has been answered? It seems more about affordability? Any idea on what I should do next?
Sarah L says
Dear Mrs. XXXXX
Thank you for contacting Volkswagen Financial Services on 15 January 2024, I am sorry you have had cause to complain.
Your Complaint
My understanding of your complaint is you believe you were overcharged the rate on your finance agreement on your Volkswagen Tiguan due to Retailer Commission.
My Investigation
You are referring to the Financial Conduct Authority’s (FCA) review into motor finance published in March 2019 and entitled “Our work on motor finance – final findings” (“the FCA Findings”), CONC 4.5.2 and CONC 4.5.3.
CONC 4.5.3 (R) is a Rule but applies to credit brokers. We are not a credit broker, we are a lender. Nevertheless, we can confirm that Marriott Motor Group Ltd t/a Bury St Edmunds Volkswagen will provide a written “Status Disclosure” document, which sets out their regulatory status as well as other key information and the existence of commission.
In addition, the existence of commission was disclosed in the Agreement at clause 15 where it states “We may pay commission or other remuneration to a supplying dealer or other intermediary who introduces you to us.” You have signed the Agreement, agreeing to be legally bound by its Terms and Conditions.
You were also provided with pre-contract information by Marriott Motor Group Ltd t/a Bury St Edmunds Volkswagen and a copy of the Agreement in advance of signing. You knew exactly how much you were going to be charged for the credit, the APR and the amount of the monthly instalments required under the Agreement. The pre-contract information stated that we might pay commission to a supplying dealer or other intermediary.
Furthermore, you have signed a pre-contractual explanation checklist that states you were told to read the agreement carefully and were provided an opportunity to ask questions about the agreement.
You did not pay the commission, we did and that is justifiable for the work the undertaken by the dealer.
You were provided with pre-contract information and a copy of the Agreement numbered XXXXXX for XXXXXX, which clearly sets out the rate of interest payable under the agreement. You knew what the rate of interest payable under the Agreement was, and would have been able to consider alternative finance options from other lenders prior to signing the agreement. Consequently we do not uphold your complaint concerning the rate of interest.
My Decision
In view of the above the circumstances we are unable to uphold your complaint.
You have the right to refer your complaint to the Financial Ombudsman Service, free of charge but you must do so within six months of the date of this email.
Sara (Debt Camel) says
ok, if you used the template in the article above, they have not answered the question about discretionary commission.
Please go back to them and say you would like to know if the commission paid by VWFS to the broker/dealer included an element of discretion where the broker/dealer was allowed to determine what the interest rate on the finance would be and thereby get additional commission. Or was the commission paid a fixed amount that could not be varied by changing the interest rate on the finance.
Say you do not want to have to send this complaint to the Ombudsman if there was a fixed rate of commission with no discretionary element. But if there was any discretionary element you will be making a complaint and the FCA is now allowing 15 months to take one of these complaints to the Ombudsman you understand.
(PS please dont leave duplicate comments if one is not published immediately)
Sarah L says
Thanks Sara, I did respond to the them along these lines on 7th February but am, as yet, waiting to receive a response. I will give them 4 weeks before chasing, but just wanted to say thank you for your help so far.
I’ll keep this updated as and when I do receive a response.
(ps, sorry, I think I was having issues with my phone, but I’ve moved to desktop now so this should hopefully mean no more issues!).
Shelley Bollington says
Hi,
I had car finance on a vehicle purchased through Jigsaw finance which was then acquired by Raphael finance. Do you have any contact details for these please?
Sara (Debt Camel) says
Raphael has gone into administration.
See my response to Shirley here about what i suggest you do: https://debtcamel.co.uk/car-finance-commission-get-refund/comment-page-2/#comment-525762
Jimmy M says
I was a bit confused on who to complain to so I sent a query to both Hippo as the dealer and Motonovo who I pay / the finance is with. Motonovo are still investigating but Hippo replied today to say that they have found that a discretionary arrangement *was* in place for my arrangement and that they will issue a response but subject to the pause in September.
I paid £2600 interest at 11.9% APR. Guess it just wait and see now.
Sara (Debt Camel) says
Good. So now you know you DO have a claim for this discretionary finance.
Ellie says
Hi, can I ask the finance company on behalf of my son (deceased) who had finance through VW Finance at the time of his death in 2019?
Sara (Debt Camel) says
What happened to the finance?
Ellie says
From memory, he was 2 years through a 3 year deal. The car was collected and finance cancelled following his death.
Sara (Debt Camel) says
So if you were his executor (or the administrator of his estate if there was no will), you should be able to make a claim. It may be hard for you to tell how much interest was paid as the balance was written off – it may be less than the amount quoted on the contract
Ellie says
Yes, I was executor and beneficiary, and dealt with the car at the time. I will dig out the paperwork and contact them. Many thanks for you advice.