The FCA’s car finance review 

On 11 January 2024, the Financial Conduct Authority (FCA) announced it would be reviewing a practice which it thinks may have led to some car finance customers being overcharged. The review focuses on ‘discretionary commission arrangements’ (DCAs). 

What DCAs were and why they’re being reviewed 

DCAs allowed brokers to adjust the interest rate a car finance provider offered to a customer. (A broker is the person who arranges your car finance, for example, your car dealer.) 

The FCA banned DCAs in 2021 to reduce the risk of brokers increasing interest rates in order to earn a higher commission. However, the FCA is now undertaking its review to assess the historical impact of DCAs on car finance customers. 

Were you impacted? 

You may have been impacted if you purchased a vehicle with car finance before 28 January 2021 and a DCA was in place. This is more likely to be the case if you bought your car through a broker or dealer.  

If you used car finance to purchase a car after 28 January 2021, this won’t apply to you. This is because DCAs were banned by the FCA from this date.  

How to complain 

If you think you were impacted and would like to bring a complaint, the process is quick, simple and free. You don’t need to pay anybody — such as a Claims Management Company (CMC) or solicitor — to represent you.  

By bringing your complaint to us directly, you’ll receive any compensation that’s due in full — claim firms typically charge up to 25% of the total compensation, plus VAT. If it would make you feel more comfortable, you could ask a family member or friend to help support your complaint.  

To make a complaint, please get in touch via Martin Lewis’s Free Car Finance Reclaim Tool as it will direct your query straight to us. Link: https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/ . 

You can also give us a call and we can log an enquiry for you. Or you can email us at complaints@zopa.com. 

What happens next 

To allow sufficient time to investigate, the FCA has extended the normal 8-week response deadline. This means, if you make an eligible DCA complaint, you can expect to receive a response from us between 26 September 2024 and 4 December 2025.

Once a final response has been provided, if you remain unhappy, you can refer your complaint to the Financial Ombudsman Service (FOS). The deadline for referring your complaint to the FOS has been extended from 6 months to 15 months.

You can find out more information about the FCA review on their website.