The Financial Conduct Authority (FCA) has launched an investigation into
discretionary commission arrangements used by motor finance lenders between 6 April 2007 and 1 November 2024. This period spans over 17 years, affecting millions of consumer agreements across various financial institutions. The FCA's probe aims to assess whether these practices comply with regulatory standards, particularly concerning fair treatment of customers.
Which Lenders are Affected?
The investigation covers a wide range of lenders that used discretionary commission arrangements during the specified period. Here is a list of major affected entities:
- Black Horse (Lloyds): A subsidiary of Lloyds Banking Group.
- Barclays Partner Finance: The motor finance division of Barclays Bank PLC.
- Close Brothers Motor Finance: An independent motor finance lender.
- Santander Consumer Finance: A division of Santander UK.
- MotoNovo Finance: Part of the Novuna Group, formerly known as Volkswagen Financial Services (VFS) in the UK.
- BMW Financial Services: The captive finance arm for BMW and MINI vehicles.
- Volkswagen Financial Services: Captive finance company for Volkswagen brands like VW, Audi, SEAT, and Skoda.
- Ford Credit: Motor finance division of Ford Motor Company.
- Mercedes-Benz Financial Services: Finance arm for Mercedes-Benz vehicles in the UK.
- Moneybarn: An independent motor finance lender.
This list is not exhaustive; many other lenders may also be affected. The FCA investigation aims to cover all entities that engaged in discretionary commission practices during the specified period.
Major Bank-Owned Lenders
Three of the most prominent bank-owned lenders affected by the FCA investigation are:
Black Horse (Lloyds)
Black Horse is a subsidiary of Lloyds Banking Group, offering motor finance solutions for both new and used vehicles. The lender has been implicated in the discretionary commission practices being investigated.
Barclays Partner Finance
Barclays Partner Finance provides motor finance products to customers through various dealership partnerships across the UK. This division of Barclays Bank PLC falls under the scope of the FCA investigation due to its involvement with discretionary commissions.
Santander Consumer Finance
Santander's motor finance arm, Santander Consumer Finance, also faces scrutiny from the FCA for potential non-compliance with regulatory standards related to discretionary commission arrangements.
Manufacturer (Captive) Finance Lenders
Several manufacturers have their own captive finance subsidiaries that offer financial services directly tied to vehicle purchases. These companies are heavily involved in the motor finance market:
BMW Financial Services
BMW Financial Services is the financing arm of BMW Group, providing loans and leasing options for new and used BMW and MINI vehicles.
Volkswagen Financial Services
Volkswagen Financial Services (VFS) offers a variety of financial products to support vehicle purchases from its extensive brand portfolio, including VW, Audi, SEAT, and Skoda.
Ford Credit
Ford Credit specializes in financing solutions tailored specifically for Ford Motor Company's customers. The company extends credit services for both new and pre-owned vehicles under the Ford brand.
Mercedes-Benz Financial Services
Mercedes-Benz Financial Services provides a range of financial products to support the purchase of Mercedes-Benz cars, vans, trucks, and buses.
Toyota Financial Services
Toyota Financial Services offers motor finance solutions that cater to customers looking to acquire new or used Toyota vehicles. The company is part of Toyota's global network dedicated to supporting vehicle ownership financing needs.
Independent Motor Finance Lenders
Several independent lenders also fall under the purview of the FCA investigation for their involvement in discretionary commission arrangements:
Close Brothers Motor Finance
Close Brothers Motor Finance operates independently from any major automotive manufacturer, offering a variety of finance products that cater specifically to motor retail customers across different brands and models.
MotoNovo Finance
MotoNovo Finance is part of the Novuna Group (formerly Volkswagen Financial Services in the UK) and provides vehicle financing for both new and used cars. The company has been scrutinized by the FCA alongside its parent company VFS, as well as other affected lenders.
Moneybarn
Moneybarn offers flexible motor finance options to help customers purchase vehicles at competitive rates. This independent lender is also subject to the FCA's investigation due to its historical use of discretionary commission practices during the specified timeframe.
How to Check Your Agreement This will confirm whether they are regulated by the FCA.
- Review Your Finance Agreement: Look through the documentation provided at the time of your motor finance agreement to identify any references to discretionary commissions or similar terms.
- Check Your Credit File: Review your credit report from a reputable agency like Experian, Equifax, or TransUnion. These reports often include details about open financial agreements and can help you verify if your lender is involved in the investigation.
How Many Agreements are Affected?
The FCA estimates that 12.1 million eligible agreements (FCA, March 2026) may be affected by this investigation (FCA, 2024). The total value of these agreements amounts to approximately £7.5 billion (FCA estimate), with an average recovery potential per agreement estimated at £829 (FCA estimate).
If you suspect that your motor finance agreement may be affected by the FCA's discretionary commission investigation, it is essential to lodge a formal complaint directly with your lender. Here are the steps:
1.
Gather Documentation: Collect all relevant paperwork and any communication records related to your motor finance agreement.
2.
Contact Your Lender: Reach out to your lender’s customer service department via phone or email to initiate the complaints process.
3.
Submit a Formal Complaint: Fill out any necessary forms provided by your lender, detailing your concerns about potential misconduct regarding discretionary commissions during the 6 April 2007 to 1 November 2024 timeframe.
4.
Follow Up and Track Your Case: Keep track of all interactions with your lender and maintain copies of correspondence for record-keeping purposes.
5.
Escalate if Necessary: If your complaint is not resolved satisfactorily within a reasonable period, consider escalating the issue to senior management or seeking mediation through an independent body like the
Financial Ombudsman Service (
FOS).
You do not need a
claims management company to handle these processes; all communication and resolution can be done directly with your lender at no cost to you.
What if Your Lender No Longer Exists?
In scenarios where the motor finance provider no longer exists, several avenues are available for seeking redress:
- Successor Companies: If a new entity has taken over operations from the original lender, contact them using methods outlined in previous sections.
- FSCS Protection: The Financial Services Compensation Scheme (FSCS) provides protection to customers of failed financial firms. Ensure you understand your eligibility for compensation under this scheme.
- Financial Ombudsman Service Jurisdiction: Should direct resolution efforts with the lender or successor company prove unsuccessful, consider filing a complaint with the FOS. They can offer an impartial review and potential mediation to resolve disputes arising from motor finance agreements issued during the specified period.
Sources and References
- Financial Conduct Authority (FCA). (2024). Motor Finance Investigation Statistics.
- Office for National Statistics (ONS) Census 2021.
- Experian, Equifax, TransUnion Credit Reports.
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.