Opening Paragraph
MLJ.org.uk provides information on the Financial Conduct Authority's (FCA) investigation into
discretionary commission arrangements in motor finance, which may affect van financing agreements. If you financed your van through a
[Personal Contract Purchase](https://mlj.org.uk/guides/pcp-claims) (PCP) or
Hire Purchase (HP) agreement between 6 April 2007 and 1 November 2024 with one of the major lenders involved, including
Black Horse,
Lombard,
Close Brothers Motor Finance, Hitachi Capital Vehicle Solutions, and
Santander Consumer Finance, your agreement may be affected by this investigation. It is important to understand how these arrangements work and what steps you can take if you believe your finance terms were unfairly set.
How are Vans Typically Financed?
Vans, like cars, are often financed through Personal Contract Purchase (PCP) or Hire Purchase (HP) agreements. PCP plans typically require a deposit payment at the start, followed by regular monthly payments over a set period, usually between 24 to 60 months. At the end of the agreement, you have the option to buy the van outright for its Guaranteed Future Value (GFV), return it to the lender, or enter into another finance agreement.
Hire Purchase agreements are similar but offer ownership from day one, with a lump sum deposit and regular monthly payments until the total amount is paid off. The term lengths can vary widely depending on the initial cost of the van, usually ranging between 24 to 60 months as well.
In both cases, interest rates play a crucial role in determining your finance costs. Higher interest rates mean higher monthly payments but potentially lower GFVs at the end of PCP agreements if you choose to buy out the van.
A discretionary commission arrangement (DCA) is a practice where vehicle dealers are incentivised by lenders based on the terms they set for customers. In this context, dealers can influence interest rates and other key financial terms in PCP or HP agreements. This means that instead of setting a standard rate across all deals, dealers may be able to negotiate higher rates for themselves.
For van finance specifically, DCAs allowed dealers to earn extra commission by increasing the cost of financing for customers through higher interest rates. The FCA's investigation aims to determine whether these arrangements were fair and if they led to excessive charges for consumers.
Which Van Finance Lenders are Affected?
The major lenders involved in the FCA’s motor finance investigation include:
- Black Horse
- Lombard
- Close Brothers Motor Finance
- Hitachi Capital Vehicle Solutions
- Santander Consumer Finance
These lenders have been identified due to their significant market share and the volume of agreements issued during the relevant period. However, this list is not exhaustive, as other smaller finance providers may also be involved.
How Many Van Finance Agreements are Affected?
The FCA estimates that there were 12.1 million eligible agreements (FCA, March 2026) between 6 April 2007 and 1 November 2024 (FCA estimate). Of this total volume, a significant portion involves van financing. The estimated value of these agreements is around £7.5 billion (FCA estimate), with the average agreement amounting to approximately £829 (FCA estimate).
Given that vans often require more substantial funding than smaller vehicles due to their commercial use and higher initial costs, many of these affected agreements are likely related to van financing.
How to Check Your Agreement Agreement Type: Ensure that your agreement was either a Personal Contract Purchase (PCP) or Hire Purchase (HP). Other types of agreements are not typically subject to this investigation.
2.
Dates: The agreement must have been issued between 6 April 2007 and 1 November 2024. Agreements before the start date or after the end date are not part of the FCA's review.
3.
Lender Name: Confirm that your finance was provided by one of the major lenders listed above, such as Black Horse, Lombard, Close Brothers Motor Finance, Hitachi Capital Vehicle Solutions, or Santander Consumer Finance.
If all these criteria match your situation, there is a possibility that the FCA-estimated scheme average is £829 per eligible agreement.CAs negatively impacted your finance terms.
You can complain directly to your lender without the need for a
claims management company. The process typically involves:
1.
Reviewing Documentation: Gather all relevant documents, including your original agreement and any communication with your dealer or lender.
2.
Drafting a Complaint: Write a formal letter outlining your concerns. Clearly state that you believe your finance terms were unfairly set due to DCAs. Include specific details about the interest rates and other financial terms you think may have been affected.
3.
Submitting Your Complaint: Send your complaint directly to your lender's customer service department or dedicated complaints handling team. Make sure to keep copies of all correspondence, including emails and letters sent and received.
4.
Waiting for a Response: Lenders are required by law to respond within eight weeks of receiving your complaint. If you do not hear back within this timeframe, you can escalate the issue further by contacting their customer service line or writing another letter urging them to expedite the process.
You can complain directly to your lender for free - you do not need a claims management company.
What Compensation Could You Receive?
If it is determined that DCAs negatively impacted your finance terms, compensation could be awarded based on FCA estimates. The amount of compensation will depend on factors such as:
- Interest Rate Differences: If the interest rate set by your dealer was higher than what would have been standard without a DCA.
- Total Cost of Finance: The overall impact of any unfair practices on the total cost of finance over the term of your agreement.
For van agreements, the compensation might reflect the £829 average per eligible agreement estimated per affected agreement (FCA estimate). However, the actual amount could be higher or lower depending on individual circumstances. Lenders will review each case individually to determine fair compensation based on evidence and FCA guidelines.
If your lender does not respond within eight weeks of receiving your complaint or if you are unsatisfied with their response, you can escalate the matter to the Financial Ombudsman Service (
FOS). The FOS is an independent body that investigates complaints against financial services providers and aims to resolve disputes fairly.
To escalate a case to the FOS:
1.
Review Lender's Response: Ensure you have thoroughly reviewed any response from your lender before escalating.
2.
Contacting the Ombudsman: Write to the Financial Ombudsman Service requesting they review your complaint. Provide all relevant documentation and evidence.
3.
Waiting for a Decision: The FOS will investigate your case, considering both sides of the argument. They may contact you for additional information or arrange meetings with both parties involved.
4.
Receiving an Outcome: Once their investigation is complete, the Ombudsman will issue a decision letter outlining whether they support your complaint and what actions are required as a result.
Sources and References
- Financial Conduct Authority (FCA). "Motor Finance: Discretionary Commission Arrangements Investigation." FCA Publications.
- Financial Conduct Authority (FCA). "Estimate of Affected Motor Finance Agreements." FCA Data Insights, 2024.
Key FCA Figures
The FCA confirmed on 30 March 2026: 12.1 million eligible agreements, £829 average compensation per agreement, £7.5 billion total redress at 75% consumer uptake, and £9.1 billion total cost to firms. The scheme covers agreements from 6 April 2007 to 1 November 2024. Two deadlines apply: 30 June 2026 for post-2014 agreements and 31 August 2026 for pre-2014. Final complaint deadline: 31 August 2027.
You can complain to your lender directly for free. You do not need a claims management company.
---
MLJ.org.uk (mlj.org.uk) is a free, independent information service. We are not a claims management company, solicitor, law firm, or financial adviser. We do not handle complaints, process claims, charge fees, or accept any percentage of compensation. This information does not constitute legal or financial advice. You can complain to your lender directly for free. You do not need a claims management company. If your lender rejects your complaint, you can escalate to the Financial Ombudsman Service at no cost. For personalised legal or financial advice, consult a qualified professional.