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If you had a car finance agreement between 2007 and 2024, you could be one of the millions covered by the FCA’s redress scheme, which addresses three types of mis-selling: hidden discretionary commission, unfairly high commission, and undisclosed contractual ties between lender and dealer. The single most useful thing you can do today is find out who your lender was and check your agreement details, either through your own records or a free agreement check, then complain if any of those three problems apply to you.
TL;DR:
- Most claims are worth around £830 on average, with larger loans and higher commission percentages tending to produce bigger awards.
- Disclosed dealer links or agreements with low or zero commission are excluded from the scheme, and a high interest rate alone does not prove mis-selling.
- To verify eligibility, check your credit report, bank statements, or dealership paperwork for agreement details and potential signs of undisclosed commission or contractual ties.
- Complaints should be directed to the lender named on the agreement, with clear evidence of mis-selling, and can be submitted without solicitor or claims management fees.
- Ongoing legal challenges mean some payments are paused, but registering claims now positions applicants for quicker resolution once the scheme resumes fully.
The FCA’s PS26/3 policy statement sets out a redress scheme covering car finance agreements taken out between 6 April 2007 and 1 November 2024. That window matters because it defines who can bring a claim under the scheme rather than through a slower, individual complaint route. Some parts of the scheme are currently subject to a legal challenge and have been suspended, so timings and payment activity may shift while that process plays out.
The scheme groups mis-selling into three categories, and understanding which one might apply to you is the first real step in working out whether you have a case:
Certain agreements sit outside the scheme. Very low or zero commission arrangements are excluded, since there is no meaningful financial incentive to mis-sell. Agreements where the lender-dealer relationship was clearly and visibly disclosed, such as branded finance from a manufacturer’s own finance arm where that link was obvious, are generally excluded too. Some very high-value loans fall outside the scheme’s scope entirely.
A high interest rate on its own does not prove mis-selling. As AutoTrader’s analysis points out, the scheme hinges on whether you were told about the commission structure or tie, not on whether your rate looks steep in hindsight. Plenty of people paid high rates through arrangements that were properly disclosed, and those cases won’t qualify.
Before you can complain, you need three things: who lent you the money, what type of agreement it was, and roughly when you took it out. Most people can piece this together in under an hour.
Note down the agreement date, the finance type, the lender’s name, your monthly payments, and any dealer paperwork mentioning commission or a “preferred lender.” These details shape the wording of your complaint later.
If the original lender has since been bought out or stopped trading, the debt and complaint responsibility usually transfers to whichever firm took over its loan book. A quick search for the lender’s name plus “acquired” or “administration” usually turns up the current contact point.
Pro Tip: Keep a screenshot or PDF of your credit report search results. If your complaint gets escalated later, having a timestamped record of when you found the agreement can support your timeline.
Once you know who lent you the money and which of the three mis-selling categories might apply, the complaint itself is fairly short. Lenders are required to have a complaints process, and you can usually find the right contact details on the FCA’s register of authorised firms or on the lender’s own website under “complaints.”
Address your complaint to the lender named on the finance agreement, not the dealership, since the lender is the regulated firm responsible for handling redress. If you’re not sure who currently owns the debt because of a merger or sale, ask the dealer or check your most recent statement for the current administrator’s details.
Your complaint should be specific rather than general. Rather than simply saying you feel you were overcharged, name the mis-selling category you believe applies:
You don’t need a solicitor or a paid claims management company to write this. MoneySavingExpert’s free reclaim tool provides a template letter that covers the necessary wording, and using it yourself means you keep 100% of whatever redress you’re owed rather than losing a slice to a claims firm. The FCA has also said the scheme is designed to be free to use, so paying someone else to do what is essentially a short letter and a wait rarely makes financial sense.
Pro Tip: Send your complaint by email or through the lender’s online portal rather than post, so you have a timestamped copy and can prove when you raised the issue.
Lenders are required to acknowledge your complaint and investigate it, and having a complaint already logged with them can put you ahead of anyone waiting to be contacted proactively under the wider scheme.
Once your complaint lands with the lender, timing depends partly on how far along the wider redress scheme is and partly on your lender’s own backlog. Lenders that receive a direct complaint from you generally have to respond faster than they would if they were simply working through their books to identify affected customers on their own schedule.
The FCA’s PS26/3 statement sets out implementation windows for the scheme, but parts of it remain paused because of an ongoing legal challenge. That means some lenders are not currently required to calculate or pay compensation until the legal process concludes, according to the FCA’s own press notice. If you’ve already complained, you’re in a stronger position to act quickly once that legal uncertainty clears, rather than waiting to be found.
If your lender identifies you as eligible without a complaint from you, expect one of two routes:
Either way, expect the eventual communication to include a breakdown of how the figure was reached, an offer amount, and instructions on how to accept it, usually with a deadline. Read the calculation explanation carefully, since it should reference the mis-selling category and show how any deductions were applied, rather than just presenting a single number.
Redress calculations under the scheme generally have two components: a refund of the unfair portion of commission, and an additional amount reflecting the extra interest you paid because of that commission, calculated at either 17% or 21% depending on when your agreement started, according to PS26/3.
The FCA estimates the scheme will return around £7.5 billion to consumers across roughly 12.1 million agreements, with an average payout of around £830 per agreement. Read the full policy statement. MoneySavingExpert’s guidance cites a broadly similar average figure, so treat anything in that range as a reasonable expectation rather than a guarantee, since individual awards vary widely depending on your loan size and commission structure.
A small proportion of cases, roughly one in three according to the scheme’s design, qualify for a fuller refund of commission plus interest, where the commission was particularly high and additional unfairness is found. Most cases fall under the standard calculation rather than this fuller category.
Key points to bear in mind when estimating your own likely figure:
As a simple illustration only: say a car cost £12,000 on finance and the dealer received £1,200 in commission, roughly 10% of the loan. If that commission was found unfairly high and undisclosed, redress might return the £1,200 plus 17% interest on that amount, working out to roughly £1,404 before any set-offs. This is purely a worked example to show the mechanics, not a prediction of what any individual reader will receive.
If your lender turns down your complaint, or doesn’t respond within eight weeks, you can take the matter to the Financial Ombudsman Service, which reviews unresolved financial disputes independently of the lender.
You can read more about how the Ombudsman reviews motor finance disputes if your case reaches that stage. Court action is rarely necessary and usually only makes sense for larger, complex claims where legal costs are proportionate to the amount in dispute, since the Ombudsman route is free and covers the vast majority of car finance disputes.
The Ombudsman can order a refund of unfair commission, interest on that amount, and, where relevant, a correction to your credit file if the mis-selling affected how your account was recorded.
Scammers have moved quickly to exploit the redress scheme’s publicity. Be wary of unsolicited calls or texts claiming you’re “owed” a specific amount, especially if they ask for your bank details, a upfront fee, or your full credit card number to “process” a payment.
The FCA has confirmed the scheme is free to use, and MoneySavingExpert warns that paid claims management companies typically take a cut of your award for work you can do yourself with a free template. If you’re unsure whether contact is genuine, hang up and call your lender back using the number on your original agreement or their official website, never a number given to you by the caller.
Pro Tip: If you suspect a scam, report it to Action Fraud and to the FCA’s own scam-reporting page, since early reports help the regulator warn other consumers quickly.
If you’d rather not spend an evening digging through old statements, a free check service can help find your car finance agreements quickly, without needing your car registration or lender paperwork to get started.
This suits readers who’ve drawn a blank on paperwork, don’t have time to chase records themselves, or simply want a quick way to confirm whether an agreement exists before deciding how to proceed.
Making a complaint about a mis-sold car finance agreement does not itself damage your credit score. Complaints are a separate process from your repayment record, and lenders aren’t permitted to mark your file negatively for raising a legitimate dispute.
Where credit scores can be affected is if the original agreement itself involved errors that were never corrected, such as late payments recorded incorrectly during a dispute period. If your redress case reveals that your file contains inaccurate information because of the mis-selling, you can ask the lender or the Ombudsman to correct it as part of your settlement.
If you’re worried about how an old agreement looks on your file while your complaint is pending, checking your credit report through Equifax, Experian, or TransUnion lets you see exactly what’s recorded and flag anything that looks wrong, separately from the redress claim itself.
Beyond the FCA’s specific redress scheme, general consumer protections still apply to car finance agreements. The Consumer Credit Act sets out baseline obligations for lenders around fair treatment and clear disclosure, and the FCA’s own conduct rules require firms to act in customers’ interests rather than their own.
You have the right to a clear explanation of any complaint outcome, the right to escalate an unresolved dispute to the Financial Ombudsman Service free of charge, and the right to have your complaint assessed on its facts rather than dismissed without investigation. These protections exist independently of the specific 2007 to 2024 redress scheme, so even agreements that fall outside that window may still be worth raising with your lender or the Ombudsman if you believe they were mis-sold.
A total loss or repossession doesn’t disqualify you from a mis-selling claim. If your car was written off in an accident and the finance was settled through an insurance payout, the redress calculation still applies to the commission and interest you paid while the agreement was active, though any settlement figure will be factored in as a set-off against your final award.
Repossession works similarly. If your car was repossessed because you fell behind on payments, that doesn’t erase a legitimate mis-selling complaint about how the original agreement was arranged. The redress owed to you is separate from any arrears or default that led to repossession, though any outstanding balance the lender pursued may be netted against a redress payment during the calculation.
If either situation applies to you, gather whatever paperwork you still have, including insurance correspondence or repossession notices, since these help establish the agreement’s timeline even if the vehicle itself is long gone.
A few signs tend to show up repeatedly in agreements later found to have been mis-sold. None of these guarantees a successful claim, but they’re worth checking for:
If any of these sound familiar, it’s worth pulling your agreement and checking the details against the three FCA categories before deciding whether to complain.
Mis-sold car finance sits within a broader category of consumer credit mis-selling, but it has its own specific rules. Payment protection insurance (PPI) claims, for example, centred on insurance policies sold alongside loans that customers often didn’t need or understand, a completely separate product from the commission structures at issue in car finance.
Mortgage mis-selling, similarly, tends to involve advice quality or affordability assessments rather than hidden commission. Broker fee structures in other lending markets can involve comparable commission arrangements, and understanding how those fees were disclosed, as explained in Haven Mark Advisers’ guide to broker fees, helps illustrate why the disclosure question matters so much across different credit products, not just car finance.
What sets car finance apart is the specific, FCA-defined redress scheme with its own dates, thresholds, and calculation method. That means a mis-sold car finance claim is assessed against particular criteria that don’t necessarily map onto how a PPI or mortgage complaint would be judged, even though the underlying idea, being sold something without full disclosure, is similar.
If you’ve already found your paperwork and you’re comfortable writing a clear complaint, doing it yourself is genuinely the fastest and cheapest route, and there’s no reason to pay anyone for what a free template covers.
A free check makes more sense when your records are patchy, you’re not sure which lender to chase, or you’d simply rather have someone else handle the back-and-forth once an agreement is found. Paperwork availability, how much time you have, and how urgently you want the matter resolved all point toward one route or the other.
My honest view is that most readers should try the free check first purely to confirm what agreements exist, then decide from there whether to write the complaint themselves or let a referral handle it. Either way, the worst outcome is doing nothing.
— Jake
Our site finds your car finance agreements for free in under 60 seconds, with no car registration and no lender paperwork needed to get started. It’s a quick way to confirm whether you have an eligible agreement before deciding how you want to pursue it.
Start your free car finance check to see what agreements are linked to you, or visit our main site to find out more about how the process works.
For the scheme’s exact rules and figures, the FCA’s PS26/3 policy statement is the primary reference, alongside the regulator’s own consumer guidance pages. For a free complaint template and practical tips, MoneySavingExpert’s reclaim guide is a solid starting point. If your complaint is rejected, the Financial Ombudsman Service’s guidance on car finance complaints explains what it needs to review your case.
Some consumers have received redress after complaining directly to their lenders, though wider payments under the scheme have been affected by an ongoing legal challenge that has paused parts of the process, according to the FCA. Complaining now still puts you ahead of the queue once that legal position is resolved.
The FCA’s scheme applies across the motor finance market generally, rather than naming specific lenders as the sole culprits, since the mis-selling categories relate to how commission was structured across many firms. If you suspect your own agreement involved undisclosed commission or a contractual tie, checking your specific lender’s complaints process is the most reliable way to find out.
Start by finding out who your lender was and what type of agreement you had, using your credit report, bank statements, or a free agreement check. Once you have those details, compare them against the three FCA mis-selling categories, discretionary commission, unfairly high commission, or an undisclosed contractual tie, to see whether a complaint is worth raising.
The FCA estimates an average payout of around £830 per agreement across the scheme, though individual awards vary depending on loan size and the commission involved. A small proportion of cases with particularly high commission may qualify for a fuller refund of commission plus interest.
No, the FCA has confirmed the scheme is designed to be free to use, and free complaint templates from sources like MoneySavingExpert cover everything most people need. Paid claims management companies typically take a percentage of your award for work you can do yourself at no cost.