Black Horse and the FCA Motor Finance Investigation
Black Horse, one of the largest motor finance lenders in the UK operated by Lloyds Banking Group, is among the financial institutions affected by the Financial Conduct Authority's (FCA) investigation into
discretionary commission arrangements (DCAs). The lender has set aside over £3.2 billion in provisions for redress as a result of this inquiry. This guide provides an overview of Black Horse’s involvement with DCAs and the steps you can take if your car finance agreement is affected.
Who is Black Horse?
Black Horse, part of Lloyds Banking Group, offers financing solutions for various vehicle types, including cars, vans, motorcycles, and commercial vehicles. The lender operates through a network of dealerships and direct channels, providing financial services to both private individuals and businesses across the UK. As one of the leading motor finance providers in the country, Black Horse has been closely involved with regulatory changes aimed at improving consumer protection.
How Did Black Horse Use Discretionary Commission Arrangements?
Discretionary commission arrangements (DCAs) were a common practice among car finance lenders during the period from 6 April 2007 to 1 November 2024. Under this arrangement, dealers had the discretion to set interest rates and commission levels for customers using their services. For Black Horse agreements, dealers could benefit financially by charging higher interest rates, leading to inflated costs for consumers.
The FCA’s investigation has revealed that such practices may have resulted in unfair terms for many car finance agreements, affecting thousands of borrowers across the UK. The use of DCAs meant that some customers might have paid more than necessary due to these discretionary decisions made by dealers.
How Many Black Horse Customers Are Affected?
According to FCA estimates, 12.1 million eligible agreements (FCA, March 2026) nationwide between June 2007 and November 2023. This includes approximately £7.5 billion in total losses incurred by consumers due to unfair terms (FCA estimate). On average, each customer could be covered by the FCA redress scheme. of about £829 (FCA estimate) if their agreement was influenced by DCAs.
Black Horse’s involvement means that a significant number of its customers may fall within this affected group. The exact number remains unclear until the FCA completes its review and issues guidelines on redress measures, but it is expected to be substantial given Black Horse's market position.
How to Check Your Agreement Agreement Type: Focus on personal contract purchase (PCP) and hire purchase (HP) agreements.
2.
Date Range: The period of concern is from 6 April 2007 to 1 November 2024.
3.
Discretionary Commission Arrangement: Confirm whether a DCA was used in your finance agreement.
You can find the relevant details by reviewing your original loan documents or contacting Black Horse directly for assistance. Your agreement number, typically found on your contract or monthly statements, will be crucial in verifying if your agreement is eligible for redress.
How to Complain to Black Horse Directly for Free
If you suspect that your car finance agreement with Black Horse was affected by DCAs, the first step is to
complain directly to the lender. Here’s how:
1.
Gather Documentation: Collect all relevant documents such as loan agreements, payment history, and any correspondence with dealers.
2.
Contact Information: Use official channels like email or phone provided on the Black Horse website.
3.
Formal Complaint: Write a detailed letter or send an email outlining your concerns and attaching supporting evidence.
4.
Follow Up: Keep track of communications and follow up if you do not receive a response within 8 weeks.
It’s important to remember that "You can complain to Black Horse directly for free - you do not need a
claims management company."
What Compensation Could Black Horse Customers Receive?
The FCA has provided average compensation figures based on industry-wide data, but individual amounts will vary depending on the specific terms of each agreement. If your car finance agreement was influenced by unfair DCAs, FCA-estimated redress under the scheme is available.
Compensation is calculated based on several factors:
- Interest Overcharges: Any excess interest paid due to higher rates set by dealers.
- Misled Customers: Those who were misled about the terms of their agreement.
- Unfair Terms: Agreements containing unfair or unreasonable clauses.
Black Horse will assess your complaint and determine an appropriate amount based on these considerations. The lender aims to provide fair redress to affected customers without requiring them to engage with third-party claim management companies.
Escalating a Black Horse Complaint to the Financial Ombudsman
If you are unsatisfied with Black Horse's response after 8 weeks, you can escalate your complaint to the Financial Ombudsman Service (
[FOS](https://mlj.org.uk/guides/financial-ombudsman-service)). This is a free service that offers impartial arbitration for financial disputes. Here’s how to proceed:
1.
Apply Through FOS: Visit the FOS website and submit an application form detailing your case.
2.
Provide Evidence: Include all relevant documentation, such as correspondence with Black Horse and any supporting evidence.
3.
Timelines: The FOS aims to resolve complaints within 8 weeks but can take longer if more information is required.
The FOS will review your complaint independently and issue a final decision that both parties are legally bound to accept.
Black Horse and the FCA Redress Scheme
Black Horse has publicly acknowledged its involvement in the FCA’s investigation into DCAs. As part of their response, the lender has set aside over £3.2 billion for redress payments to affected customers. This provision reflects Black Horse's commitment to addressing historical issues and providing fair compensation.
The expected timeline for implementing the redress scheme is ongoing, with detailed guidelines being developed by the FCA in consultation with lenders like Black Horse. Customers should stay informed through official communications from Black Horse and updates provided by regulatory bodies.
Sources and References
- Financial Conduct Authority (FCA). "Motor Finance Investigation." [Link to relevant FCA document].
- Lloyds Banking Group Annual Report 2023.
- ONS Census Data, 2021.
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.
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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.